Covering the Goulburn and Murray valleys

Goulburn Valley farms buck the trend

The bleak picture painted of dairy farm values in a recent report doesn’t apply to the Goulburn Valley and the north of the state, a property valuer said last week.

CATHY WALKER March 4, 2014 4:10am

Not selling out: The market for dairy farms in Northern Victioria is solid, a valuer said.

Opteon Property Group’s Goulburn North-East managing director David McKenzie said he was surprised to read commentary in the national media — some from one of his colleagues — that suggested while dairy processor shares may be hot tickets, farms were lukewarm.

It had been reported in the Australian Financial Review that at least $300million worth of dairy farms across Australia had failed to sell or bring in capital partners after more than a year on the market, despite appetite for dairy processing assets.

Opteon’s Western District valuer Chris Ryan told AFR there had been an over-supply of dairy farms for sale in Victoria.

‘‘There are a higher number of dairy farms being managed by the banks,’’ Mr Ryan said.

‘‘Since 2008 there has been a steady decline in values.’’

Mr McKenzie said: ‘‘I was really interested to see Chris’s comments because we do a lot of (valuation) work in the dairy sector and it’s not our experience.

‘‘My perception, and the long and short of it is, how sympathetic the banks have been. They’ve been patient (with people).

‘‘Now they have water and the farm gate prices are up — it’s a different phase of the cycle.’’

Mr McKenzie said while the report highlighted some farms in an irredeemable position, it was ‘‘quite the contrary’’ in northern Victoria, but he said farms that were going concerns naturally attracted more interest than those that had dried off.

‘‘We know what demand for milk is, for example the new Pactum factory in Shepparton,’’ he said.

‘‘The situation in the Western District is different; they rely more on rainfall and bore water.’’

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