Dorie dairy farm sells at auction for $13.5 million

Auctioning a dairy farm is a rare event, so a 223-hectare Mid Canterbury property that sold at auction this week (15 October) for $13.5 million further underlines the resurgent dairy sector.

Marketed by Dan van der Salm of PGG Wrightson Real Estate, the Dorie farm is on the coast 34 kilometres east of Ashburton on some of the region’s most fertile soils. The auction attracted around 120 people, including half a dozen registered buyers.

“This was the first auction of a local dairy farm for several years. Farmers selling property generally prefer a private treaty sale or a tender. An auction is a more immediate and public way to test the market, with complete transparency. We expected an auction would attract a strong reaction, which is how it played out yesterday,” he says.

Van der Salm says there is no shortage of buyers.

“Dairying is on an upward swing. With more than 30 farm visits to this farm, we fielded plenty of enquiry from a wide range of buyers, including well established local dairy farmers motivated to consolidate their holdings. As well as those registered and bidding, approximately the same number of genuine buyers joined us in the auction room. However, they were there to observe rather than to participate. Clearly demand for properties of this calibre exceeds supply,” he says.

A 210-hectare effective milking platform, the property has averaged 434,033 kilograms of milk solids, which equates to 550 kilograms per cow or just over 2000 kilograms per hectare. At $63,400 per effective hectare, the sale price sets a benchmark for the Mid Canterbury dairy property market.

Dan van der Salm says a young local couple purchasing their first farm with family support prevailed at the auction.

“This sale may encourage further sales activity. Some other farmers are keeping an eye on this sale, and we may see more listings as spring progresses. This auction underscores that the list of qualified buyers looking for a dairy farm is a large one. Anyone considering selling is in a positive position,” he says.

PGG Wrightson Real Estate specialist auctioneer Sloane Morpeth conducted the auction.

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