The Country 15/05/25: Peter Newbold talks to Jamie Mackay

How much is your farm worth? We take our monthly look at the rural market with the GM of PGG Wrightson Real Estate.

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Episode Transcript

Speaker 1 (00:00):
How much is your farm worth monthly? Here on the country.
We tell you because we ask an expert in the field,
the GM of PGG Rights in real estate, Peter Newbold.
Let's start with dairy, Peter, there's got to be demand
for dairy farms with a ten dollar payout and looking
good for another one next season.

Speaker 2 (00:16):
Yeah, look, Kai, Jamie, look it is. There's a lot
of demand out there. The biggest challenges and I guess
we'll come into those winter months.

Speaker 3 (00:23):
Is there's not enough stock.

Speaker 2 (00:26):
So that's something I think everyone needs to think about.
You know, these buyers out there are willing to get
into the dairy scene. I think one of the things
often I see happening is that you know, people tender,
let's hang on, let's bank it. But you know, when
there's demand out there, it's probably a good time to
looking at moving on. And the other interesting thing is

(00:48):
I think we'll see a number of dairies. I know,
with carving and all that, it becomes challenging that I
think we'll see a number come to the market early
this year, you know, in the spring. So yeah, things
are looking good and dairy, we just need more stock.

Speaker 1 (01:00):
Very difficult, as we all know to pick the top
or the bottom for that matter of the market. Okay,
sheep and beef properties now renewed profitability in both sectors.
Beef's at record prices, Lamb's doing very well. We won't
go on too much about the strong wall side of things,
but there is the elephant in the room, and you've

(01:21):
got to be careful. You've got to tread warily on
this one as well. Peter Newbold, the carbon farming conversions,
they're still happening.

Speaker 3 (01:30):
Yeah, they are.

Speaker 2 (01:30):
Look, I actually think the horse has bolded in the
space anyway, So hopefully over time we'll see a sea
of reduction in that. But if I go to the
positive side, you know, after you know good returns, you know,
when you look at the sheep and beef price at
the moment are at extraordinary high levels. There's strong, strong

(01:50):
sentiment out there, and it's and the sheep and beef
property sales have turned the corner. So if you look
at some of those traditional heartland areas like otagoin Tree,
you know, why are Appa Hawks Bay. We are seeing
those properties now moving and we're seeing a lot more
interest in that space.

Speaker 3 (02:07):
So I think that's really exciting.

Speaker 2 (02:10):
And it means a lot of those farmers who were
I guess in the last couple of years struggling. Now
it can move forward positively, especially if those ones who
want to sell and move on.

Speaker 1 (02:21):
Do you think the government's regulations or new laws that
are due to come and to affect in October, I
think will stem the flow. Not a forestry, because forestry
is good, but of carbon farming and more particularly, the
worrying thing is the blanket planting. Because there's plenty of
places on a farm where you can plant some trees.
It's the blanket farming of good land that is the problem.

Speaker 3 (02:45):
Yeah, look, and I think you're right there.

Speaker 2 (02:46):
You know there are there are farms where you know
it makes good sense to plant some trees. I actually
think it's going to slow, and you know, you get
different signals from different people, but I think there is
I guess more concerns now about managing this space better
because when you look at it, you know, at the

(03:06):
end of the day, you know, whether we like it
or not, our sheep and beef and dairy industries are
critical for New Zealand moving forward. So I have a
sense it's going to slow and I think it'll be
more controlled moving forward.

Speaker 1 (03:21):
Talk to me about horticulture. Can we fruits on are
real high at the moment? Is that coming through?

Speaker 3 (03:27):
Yeah?

Speaker 2 (03:27):
It is. Actually we've got an action taking place today,
So definitely that market is starting to move. I think
people are there's a renewed confidence there. As you said,
returns are good, so we're going to see more activity
in that coming into the spring. And I think if
you look at all the sectors at the moment this year,
if I look at it, you know, everything's been perfect,

(03:48):
Everything's lined up, So I think you're going to see
hot sheep and beef dairy. I think as we move
into spring, I think we're going to see good sales.
The only thing I would probably meantion is I don't
think we're going to see a lot of movement and
values upwards. I think they'll remain reasonably steady versus you know,

(04:08):
other other times in the past where you suddenly the
cycle has turned. So yeah, I think we're going to
see good sales and good interest as we move into
the spring months.

Speaker 1 (04:18):
Absolutely, farmland should be about yield or return rather than
capital gain. And the other interesting factor that will come
into play this year is interest rates.

Speaker 2 (04:29):
Yeah, I think that's it. And I was talking to
one of our key people this morning, and you know,
when you add returns and then you add in that
interest rate piece and let's hope inflation stays where it is.
I think we're in a good space looking forward over
the next couple of years. So that's really exciting.

Speaker 3 (04:46):
I think for the country, we're in a good space.

Speaker 1 (04:48):
Hey, Peter Newbold, thanks for your time. Looking forward to
catching up with you and the chief executive of PGG
Rights and Stephen Gerrien at Field Days as always, and
we'll have our annual catch up with the team from
the IHC and Rural Scheme. Thank you very much to
PGG Wrightson for everything you guys do for this wonderful
cause here.

Speaker 3 (05:08):
Thanks Jeremie, looking forward to catching up with you. For
your guys,