21 Jan 2013

Higher milk payouts may spur investment

1:49 pm on 21 January 2013

One of the country's biggest dairy farming operators is picking increased interest in buying dairy farms this year driven by higher milk payouts.

MyFarm manages more than 40 dairy farms on behalf of New Zealand and overseas investor syndicates.

Last year, more than 70 New Zealanders invested $35 million in four new MyFarm-managed dairy farm syndicates and eight established syndicates.

That was down on the previous two years.

MyFarm says that reflected falling dairy commodity prices for the first half of the year and a lower milk price for most of the year.

But director Grant Rowan predicts that will change this year.

Dairy commodity prices lifted again at last week's global dairy trade auction to their highest level in more than a year.

Mr Rowan says there's a reasonable supply of dairy farms on the market, although the surge in the value of Fonterra dairy co-op shares with the introduction of Trading Among Farmers at the end of last year has clouded the market for sellers and buyers.

He says said dairy conversions have eased in Southland in the last 12 months, but have continued strongly in Canterbury, where he expects the trend to continue as proposed new irrigation schemes begin operating.