Land Prices

Tasmania has traditionally had lower land prices than comparable dairy areas in Victoria and New Zealand. The tables below summarise dairy farm sales over the period 2012 to 2014, and for the prior period 2009 to 2011. Also included is an analysis of some non-dairy farm sales where there is potential for conversion into new dairy farms. Potential conversion farms include larger-scale beef or cropping farms in the higher rainfall areas and lower-priced properties in the lower-rainfall areas that have access to a plentiful supply of irrigation water.


Dairy Farm Sales Analysis: 2009-2011

1) Farm area and total value

    Farm Area       Farm Price    
Region Number of farms analysed Dryland Irrigated Bush/ waste Total Land Improves Total
    (ha) (ha) (ha) (ha) ($m) ($m) ($m)
Circular Head 9 114 31 18 163 1.93 0.54 2.47
North West 3 86 67 42 195 2.75 0.84 3.58
North 4 67 261 37 365 4.75 1.61 6.35
All dairy farms 16 97 95 27 220 2.79 0.86 3.65
Potential conversion farms 7 269 94 126 489 2.46 0.41 2.87

Includes irrigation equipment

Source: Opteon, March 2014

2) Per hectare values

    Value per hectare Per total hectare   Per effective hectare  
Region Number of farms analysed Dryland Pasture Irrigated Pasture1 Improves2 Total farm2 Total farm3
    ($/ha) ($/ha) ($/ha) ($/ha) ($/ha)
Circular Head 9 13,900 20,250 3,870 17,630 19,420
North West 3 14,330 20,000 4,070 17,300 21,620
North 4 9,680 14,750 4,960 18,000 20,150
All dairy farms 16 13,320 14,830 4,860 18,170 20,000
Potential conversion farms 7 6,020 9,490 1,140 7,740 9,700

1. Includes underground irrigation infrastructure, and availability of water
2. Total value divided by total farm area – including bush/waste
3. Total value divided by effective area (dryland plus irrigated pasture)

Source: Opteon, December 2011


Dairy Farm Sales Analysis: 2012-2014

1) Farm area and total value

    Farm Area       Farm Price    
Region Number of farms analysed Dryland Pasture Irrigated Pasture Bush/ waste Total Land Improves1 Total
    (ha) (ha) (ha) (ha) ($m) ($m) ($m)
Circular Head 7 68 38 9 115 1.44 0.44 1.88
North West 4 70 32 24 126 0.83 0.45 1.28
North 3 76 70 17 162 2.20 0.63 2.83
North East 3 60 28 9 97 0.89 0.46 1.35
All Dairy Farms 17 68 40 14 123 1.33 0.48 1.81
Potential conversion farms 5 137 305 300 741 4.10 0.65 4.78

Includes irrigation equipment

Source: Opteon, March 2014

2) Per hectare values

    Value per hectare Per total hectare   Per effective hectare  
Region Number of farms analysed Dryland Pasture Irrigated Pasture1 Improves2 Total farm2 Total farm3
    ($/ha) ($/ha) ($/ha) ($/ha) ($/ha)
Circular Head 7 13,690 13,580 3,270 17,600 18,600
North West 4 7,100 11,130 4,390 11,710 14,290
North 3 11,570 15,730 3,450 15,940 18,150
North East 3 7,790 11,550 4,740 13,940 15,260
All dairy farms 17 10,720 12,690 3,830 15,270 16,900
Potential conversion farms 5 6,430 9,330 1,090 7,890 10,990

1. Includes infrastructure and water
2. Total value divided by total farm area – including bush/waste
3. Total value divided by effective area (dryland plus irrigated pasture)

Source: Opteon, March 2014


Comments

  • A similar number of dairy farms have been sold over the past two years as in the previous 2009 to 2011 period – 17 farms versus 16.
  • The average size of those farms, however, is significantly smaller – 122 versus 220 hectares.
  • Many of the 17 farms analysed in this latest period were smaller sub-commercial farms – particularly in the North West area. Therefore, the overall average $16,900 per effective hectare in the latest 2012 to 2014 period is not strictly comparable with the $20,000 per effective area in 2009 to 2011.
  • Five of the 17 farms sold between 2012 and March 2014 were either mortgagee sales or sales under duress. Six were sold to an adjoining neighbour.
  • Dryland values (bare) were analysed at from $8,000 to $19,000 per hectare for larger, more commercial farms, with generally higher values in the Circular Head area, and in the North (Deloraine area).
  • Irrigated land was generally analysed at between $2,000 to $5,000 per hectare higher than dryland area on the same farm.
  • Dryland values (bare) for potential dairy conversions varied from $3,750 to $8,700 per hectare. Irrigated land on the potential conversion farms varied from $7,000 to $$11,500 per hectare.