Monday, 04 February 2013 10:33

Farm confidence split

Any increase in farmer confidence comes from the dairy sector and even that is off a low base. That is one of Federated Farmers' conclusions from its 2012/13 Mid-Season Farm Confidence Survey.

"At the mid-point in what is a tough 2012/13 season, we are seeing some improvement in confidence since the start of this season. That masks a real split between dairy and the rest of pastoral agriculture," says Federated Farmers president, Bruce Wills.

"Undoubtedly rising global dairy prices and upward revisions in payout forecasts have helped the dairy sector regain some confidence. Then again, this comes off deep pessimism recorded at the start of the season and things are hardly buoyant now.

"Then we have the strong Kiwi dollar acting like a sea anchor on all export returns."

Dairy farmers are less pessimistic but this is not the breaking of a new dawn, says Wills. The good news for the economy is dairy farmers expect to increase production and spending, with only a small drop in those expecting to reduce debt.

"On the other hand, in the sheep, beef and grain sectors, confidence continues to sink. Meat and fibre farmers have seen prices reverse while the high dollar erodes what they ultimately get paid. Beef had been treading water but just this week dropped 10c per kilogram.

"Sheep farmers are feeling the heat because lamb prices are down around 35% on the same time last year. Wool is also struggling and this has seen meat and fibre farmers become even more pessimistic about their profitability."

Wills says there is a growing sense of frustration about filling skilled vacancies. "All farmers agree they are struggling to find skilled and motivated staff and this seems odd given unemployment figures," says Wills. "Skilled and motivated dairy staff are especially hard to find so is there a mismatch between where people live as opposed to where the jobs are?

"And these jobs are not low skilled or low paid either. I can say that having reviewed Federated Farmers Farm Remuneration survey we send to our members."

Wills says the mild El Nino means sheep and beef production will likely be down this season. Sheep and beef farmers cannot increase production to offset lower prices and the high dollar.

"As the survey was in the field in the first half of January, the current dry spell will be of mounting concern," he says. "We are also aware the 'dry' is now biting into dairy production in the North Island especially.

"While some dairy farmers expect to increase debt most do not, however, more meat and fibre farmers expect to reduce spending and increase debt to get through. It is a concern as agricultural debt approaches $50bn, then again, households now owe over $191bn.

"You can summarise the big issues of concern to farmers as the increasing cost of farming staples, including the cost of regulation and compliance, what we are getting paid for our products and of course, that high Kiwi dollar.

"It underscores the need for the Government to focus its spending on those things that will increase production while simplifying and streamlining regulation. It may not be 'sexy' but it is what the economy desperately needs.

"Tackling the high dollar starts not with a printing press, but by central and local government cutting back on borrowing. While some agriculture debt is about survival, government still has an entrenched 'borrow and spend' culture that needs to change.

"Cutting seems to be the policy option 'that dare not speak its name' in some quarters."

Wills says the 2012/13 Mid-Season Farm Confidence Survey shows pastoral farming to be in two speeds. It is encouraging dairy farmers are more positive than six months ago, but the deepening pessimism of meat and fibre and our grain farmers is concerning.

"We can only hope the second half of the 2012/13 season turns around because the global demand is there and the recently announced Primary Growth Partnership for red meat must deliver what Federated Farmers has striven for; unity," Wills says.

More like this

Current drought may go on

If it's dry where you are now, you’d be well advised to prepare for drought next spring, says a Marlborough farm and climate consultant.

Councils must keep it fair

Rates are being set nationwide as local authorities prepare their long term plans (LTP) for the next three years.

More financial pain

The financial pain for dairy farmers will hit home early in the coming season, according to the head of Federated Farmers dairy section Andrew Hoggard.

Investing in science

The Riddet Institute and the Bio-Protection Research Centre are to receive government funding after their applications to the CoREs (Centre of Research Excellence) were accepted for the second time.

More from this category

Whitehaven Wine Company

A Farm Succession Summit at Massey University tomorrow and Saturday will bring together leading researchers and stakeholders from New Zealand and around the world.

Whitehaven Wine Company

A CHILLY first day kept the crowds away from Canterbury A&P Show on Wednesday last week but farm supply exhibitors told Rural News they’d received good enquiry nonetheless.

Whitehaven Wine Company

NEW FACES leading the two main meat processing cooperatives will prove the acid test of what’s really prevented industry reform to date, says one of the departing chief executives.

Whitehaven Wine Company

Grey clouds still hang over the global economy, says Rabobank in its July Agribusiness review for New Zealand and Australia.

Whitehaven Wine Company

The best of New Zealand's growing talent will be going head-to-head this month in a bid to win the title of Young Grower of the Year at Auckland's Ellerslie Event Centre, on Monday, July 23.

Whitehaven Wine Company

Zespri forecasts a record season for Gold kiwifruit even though the new replacement Gold3 orchards are not yet in full production.

Whitehaven Wine Company

There is a dispute between the Alliance Group and MIE about possible industry rationalisation and numbers used to make recommendations.

A LARGE and effective network involving farmers is the only way of effecting change in the dairy industry, according to Dr Rick Pridmore, DairyNZ’s strategy and investment leader for sustainability.

National Beekeepers' Association president Barry Foster says he will talk to MPI about improving their communication following the independent report into how the devastating kiwifruit vine disease PSA came into this country.

Primary Industries Minister David Carter has welcomed immediate action on the recommendations of an independent review of import requirements and border clearance processes.

New Zealand is making mistakes in research, data protection and biosecurity, for example, because we are terrible strategic thinkers, claims Labour’s primary industries spokesman Damien O’Connor.

AgriVenture New Zealand has teamed up with New Zealand Young Farmers this year to award an AgriVenture scholarship to one lucky NZYF member.

MANY DAIRY farmers around the West Coast town of Westport are frantically cleaning up their farms after a heavy rain storm swept the area last this month. 

The independent report on Psa highlights issues of setting and implementing border standards, says NZPork.

» Latest Print Issues Online

The Hound

Plonker!

The Hound reckons West Coast MP and Labour’s primary industries spokesman Damian O’Connor made a complete idiot of himself over…

Thanks mum – not

Your canine crusader had to giggle when receiving one of those pesky emails/adverts suggesting possible gifts for Mothers’ Day. One…

» Connect with Rural News

» eNewsletter

Finance-Icons-email

» Popular Reads

Agricultural Scholarship Now Open

Applications are now open for the Woolworths Agriculture Business Scholarship Programme, available to young Kiwis working in the primary industries…

Drought takes its toll

Federated Farmers North Canterbury say farmers affected by the drought are facing a tough year ahead and will be struggling…

» Events Calendar

03 June - 05 June

Sheep, Beef And Deer 2015 annual conference

10 June - 13 June

National Fieldays

10 June - 11 June

UK Cereals 2015

15 June - 15 June

SMASH Annual Conference

17 June - 17 June

SMASH Annual Conference

Markets

Mixed results for wool

Mixed results for wool

Continued shipping pressure for China kept finer crossbreds firm at the latest wool auction however coarse wools eased as volumes…

Little change for wool

Little change for wool

The North Island wool auction this week remained mostly firm except for the higher volume of shorter shears, which eased,…

Rural Life

Top steaks make the cut

New Zealand’s 20 most succulent steaks have been named as finalists in the 2015 Beef and Lamb New Zealand Steak…

A big wave from Kiwi Keith

Jim Brooker (83), of Darfield, recalls winning the first NZ Ploughing Championship at Oamaru in 1956 when he was 23…