Confidence is flowing into the rural property market, with dairy, sheep and beef, and kiwifruit all showing renewed strength after several tough years, says Peter Newbold, General Manager Livestock & Real Estate for PGG Wrightson.
Fonterra’s shareholder farmers have approved a $2-per-share return of capital, coming from the sale of its Mainland global consumer and related businesses to French dairy giant Lactalis.
This, along with improving prices, had created a “buoyant” dairy sector –and a shortage of properties, Newbold told The Country’s Jamie Mackay.
“There’s more demand out there than what we can supply, which is really interesting.
“I think what people are doing, they’re looking out, and they’re seeing an industry which has a bright outlook if you look over the next two or three years.”
Newbold said existing dairy farmers were also choosing to stay put and maximise strong returns rather than put properties on the market, adding to the squeeze.
“So yeah, it’s a real challenge at the moment.”
Pictured: Location, Scale, Quality & Opportunity - 769.27 ha 'Cotswold' North Canterbury.
As for sheep and beef farmers, Newbold said they’d weathered several difficult years, but were now benefiting from record red meat returns and improving sentiment.
However, he said the sector was still navigating the influence of carbon farming on land prices.
“Forestry etc. was underpinning the values of sheep and beef properties, and so what’s happening now is that there’s a number of farmers out there who are struggling to get their head around the actual value of their property because, of course, they’ve dropped.”
But once farmers factored in current stock values, Newbold said the overall proposition was stronger than many realised.
“The value is fairly similar to what they could have been achieving if they’d put their properties on the market during that forestry boom.”
Pictured: Modern Large Scale, G3 Gold Orchard, Edgecumbe,
Meanwhile, kiwifruit orchard prices are rising, supported by strong Zespri returns.
Newbold said PGG Wrightson recently saw an orchard sell for $1.8 million per canopy hectare — a level not seen since 2022.
“It’s been a long time coming, but we’re now just starting to see orchards come on the market, and we’re starting to see some activity in that space.”
Newbold likened it to the dairy sector.
“It looks really healthy when you look out over the next few years.
“So again, there’s another industry which I think is performing really well.”
He said it’s rare to see the sectors all performing well at the same time.
“I don’t think we’ve seen it where sheep and beef, dairy and kiwifruit are in such good space.”
Newbold, who also leads PGG Wrightson’s livestock division, said the positivity was evident at the Southern Field Days in Southland.
“I’ve never seen anything like it,” he said.
“I thought it was one of the best events I’ve been to. Everyone had a smile, and there was enthusiasm.
“It was just wonderful to be there.”
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