The dairy sector continues to underpin the record median prices of more than $4 million per dairy farm while the Otago median of all-farm prices remains just above the national median of $1.8 million per farm.
All farm categories achieved increased national median prices for the month of May this year, with both dairy and the overall national median farm prices up more than 50% on May 2007 prices, to $4.05 million and $1.86 million respectively, Mr McDonald said in a statement yesterday.
"Confidence in the rural sector shows no signs of waning and it seems hardly a week goes by without another record milk solids announcement from Fonterra," Mr McDonald said yesterday, of the record $7.90 per kg payout announced recently.
"While the economy might not be in the best of shape and the fuel price shock can be expected to hit farming quite seriously, so far that is not apparent in the latest sales figures," he said.
The median Otago farm price eased to $1.87 million in May, from $1.96 million in April, compared to $1.16 million in May 2007.
In total, 72 farms sold in Otago, up from 66 in April and 39 in May 2007.
Mr McDonald said of the 72 farms sold, 31 consisted of finishing, 28 grazing, five special, five dairy and one each arable, forestry and horticulture.
Mr McDonald said the main drivers for the rural strength were city investors wanting to get into farming, and dairying in particular, as well as farmers wanting to extend their landholdings and amalgamate properties where possible.
"It is clear that farmers are taking the view that now is as good a time as any to amalgamate properties to achieve better economies of scale," Mr McDonald said.
In Southland, 108 farms sold in May, up from 103 in April and 96 in May 2007, and the median price also rose to $2.41 million in May, up from $2.37 million in April and $1.30 million in May 2007.
