Stronger returns, lower debt, rising confidence across rural New Zealand
Tuesday, 10 March 2026
Rural New Zealand Market Outlook 2026: 7 Powerful Trends Driving Farm Confidence
For many sectors, this season is likely to be remembered as one of the more favourable in recent years, delivering some of the strongest farm gate production and returns seen in a very long time.
As we roll into March and reflect on a summer that never really arrived, farmers will look back on this season’s exceptional pasture covers and some of the strongest meat schedules in living memory.
Dairy payout forecasts are also back on track, with mid-points now revised to around $9.50/kgMS.
Not everyone has had an easy season; our arable farmers, in particular, have had a very difficult summer working through the wet weather.
Horticulture, meanwhile, is moving at pace as crops come off - or in the case of kiwifruit, are about to - supported by improving orchard gate returns.
But perhaps the most significant development is the steady deleveraging taking place across rural New Zealand. It’s a trend that has been building for some time and is occurring even before the recently confirmed $4.22b divestment of Mainland Group to Lactalis, which is expected to return $3.2b to Fonterra shareholders following the end of March.
Over the past seven years, agri-sector debt has largely plateaued at around $62b, with farm interest rates now sitting close to where they were in 2018. Over the same period, however, New Zealand’s food and fibre exports have grown significantly - from $43b to around $60b.
While rising operating costs continue to place pressure on many farm businesses, there is no question that the sector remains in strong heart.
The dairy industry provides a good example of this shift. In 2018, when the sector faced intense scrutiny over debt levels, total dairy exposure was around $42b. By December just passed, that figure had reduced to approximately $36b - and that is before the benefits of improved payouts and Fonterra’s capital distribution are fully felt.
"For vendors, the message is clear. This is an excellent time to bring well-presented farms to market. For buyers hoping prices may soften next season, the reality is that they may be waiting a long time.”
At the same time, dairy export revenue has increased from $17b in 2018 to $27b in 2025, achieved from broadly the same volume of New Zealand milk production. That represents a significant lift in value from the same underlying production base.
For vendors, the message is clear. This is an excellent time to bring well-presented farms to market. For buyers hoping prices may soften next season, the reality is that they may be waiting a long time.
Across the market, we are not seeing dramatic spikes in farm values outside the traditional bluechip locations. Instead, we are seeing something far healthier - greater confidence among buyers and lenders to conclude fair, bankable transactions.
In our view, this remains a strong environment for those prepared to take a long-term perspective. It is a year to step forward, explore opportunities and carefully consider the options available.
Whether you’re looking to buy or sell a farm or lifestyle property, the Property Brokers True Team combines local knowledge, energy and experience to help you achieve the best possible outcome.
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