Thursday, November 20, 2014

What's Mooving: "NZ dairy land values soar despite milk price slump"

See also "China's President Xi Visited New Zealand And Got A Very Warm Greeting".

From Agrimoney:
The price of New Zealand dairy land soared to its highest since the global financial crisis, despite the dent to farmers' income prospects from lower milk prices, although there is some evidence of a quality gap in demand.
A dairy farm price index compiled by the Real Estate Institute of New Zealand (Reinz) showed values last month 34% higher than in October 2013, hitting their highest since early 2009, as the world was emerging from the worst of the world financial crisis.
Even taking the August-to-October period, which covering three months is less prone to short-term volatility, the index was up 7.3% compared with the average for the July-to-September period, outperforming a flat performance for the country's farmland market overall.
The rise comes despite expectations of a sharp drop in the milk price that producers will receive in 2014-15, a reflection of tumbling values on world dairy commodity markets which are being blamed on a retreat by Chinese buyers to running down hefty stockpiles.
Prices at GlobalDairyTrade, the benchmark dairy auction run by New Zealand-based Fonterra, fell this week to a five-year low.
Fonterra, which processes the vast majority of milk in New Zealand, the top dairy exporting country, forecasts a 37% drop in farmgate milk prices this season....