The dairy boom appears to have come to a halt, with land prices dropping 10% to 15% in recent weeks on the back of tumbling international product prices and concerns Fonterra may further lower this season's payout.
Some real estate companies have gone 10 weeks without completing a dairy farm sale, as vendors and purchasers wait for the market to find a new level.
Southern Wide Real Estate director Dallas Lucas said sales of dairy farms had resumed after stalling for about 10 weeks.
He expected to complete some transactions within days, with five offers under consideration for Southland dairy farms.
Farms that in August were selling for $40 or more for every kg of milksolids produced in August or September, were now making between $35 and $38 a kg.
Mr Lucas said the market was likely to settle at that level.
Fallout from the global credit crunch, and Fonterra last month dropping its forecast payout for this season from $6.60 a kg milk solids (kg/ms) to $6, had made buyers and vendors nervous.
Mr Lucas said there were also more dairy farms for sale than there had been in recent years.
In August last year he had eight dairy farms on his books, but this August he had up to 30, some described as exceptional properties.
Recent hype associated with dairy farming appears to be dissipating but Mr Lucas said even a payout of $6 kg/ms was higher than previous years.
While Fonterra has forecast a $6 kg/ms payout, Westland Milk Products has talked about an end of season payout of $5.20 to $5.60 kg/ms.
The falling payout had made investors nervous, he said.
Though the industry had been waiting for a correction, it was quicker and larger than expected.
"It's not a disaster, it's just that we've been use to something better in the last couple of years."
Since July, whole and skim milk powder prices have almost halved.
While there were buyers looking for properties, Mr Lucas said their profile had changed, with fewer inquiries from businesspeople looking to invest in the industry.
