Tough times in dairying and an appetite by other agricultural enterprises for the south-west’s reliable rainfall have led to an unusual high number of local dairy farms being up for sale, a local real estate agent says.
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Charles Stewart real estate director Nick Adamson said there were more south-west dairy farms on the market than in past springs.
Mr Adamson said while farmgate milk prices had risen in recent months, much of the income boost to dairy farmers had been negated by high feed prices.
He believes the ongoing tough times in dairy had prompted some dairy farmers to decide to retire and put their farms on the market.
Some of the decisions to sell had been prompted by rising debt levels but not many, Mr Adamson said.
He said Charles Stewart’s Warrnambool branch had up to eight dairy farms for sale between Timboon and the SA border while the company’s wider network had about 12 in the south-west and into South Australia.
“The good thing about it is that they are selling,” Mr Adamson said.
“There is active interest from a number of sectors,” he said.
“The focus on the south-west has become greater because of water issues (elsewhere),” Mr Adamson said.
“We have people from northern Victorian dairies looking to the south-west, we have red meat graziers looking at expanding their enterprises to south-west dairy country and we have people driven by the drought out of the north looking to drought-proof their operations.”
Mr Adamson said recent sales had seen the price difference between south-west dairying land and that of grazing land in the region draw closer together.
South-west dairy country attracted prices of between $4000-$6500 an acre in the past but it had drawn closer to the $4000 plus/acre paid for grazing land, he said.
Ray White Timboon principal Gerard Delaney said he sold more than $40 million worth of dairy and other farms in the 18 months to July, this year.
Mr Delaney said about four of the farms he had sold had held hopes to sell to the Linear Capital/Aerem speculative dairy venture during the past few years only to see that venture’s plan not eventuate.
He said some dairy farmers that had hoped to sell to Linear Capital/Aerem had made life decisions based on the above market prices offered by Linear Capital/Aerem and had got into difficulties.
In 2014, Linear Capital/Aerem announced plans, that went unfulfilled, to buy about 70 dairy farms in the south-west and South Australia to supply a dairy factory it wanted to build regionally to make infant formula to export to China.
Mr Delaney said there were currently more dairy farms than usual for sale in the Nirranda area. He has also sold some farms in the Brucknell area.
Most of the sales were because the owners were retiring, he said.
Mr Delaney said many of the buyers of dairy farms had come from non-dairy sectors such as the beef industry.
One beef producer had acquired a dairy farm to continue to operate it as a dairy farm but one dairy farm he sold at Brucknell had gone to a sheep producer.
Only one of the $40 million plus of dairy and other farms he sold had been to a descendant of a dairy farmer, he said.