Farmgate prices rise as farmers rebuild confidence
Sheep and beef farmers are cautiously optimistic as farmgate prices continue to firm.
ASB head of rural banking Aidan Gent is encouraging farmers to speak to their banks when they are struggling.
He says that those farmers who need assistance from their bank should “pick up the phone, ping us an email”.
Gent, who is himself a farmer, says that farmer satisfaction is at an alltime low.
“It certainly has been a challenging time on farm at the moment and we really, really are doing all we can to support our customers,” he told Dairy News.
Gent says farmers are seeing a culmination of low product prices and record on-farm inflation, accompanied by “one of the highest and most aggressively rising OCRs we’ve ever had in history”.
All of that adds up, he says.
“No doubt that’s putting a lot of pressure on, especially when you look at the on-farm inflation challenge.”
Gent says that, historically, in these sorts of scenarios, farmers have tightened their belts. However, this time around, higher levels of cost inflation have meant that cutting costs isn’t working as well as it once did.
Additionally, sustainability is now becoming a major challenge on-farm.
Gent says there’s currently a lot of talk surrounding emissions and efficiency.
“But that’s quite challenging… because farmers are struggling to think about how their next six months are going to go let alone how the business will look like in five-or- ten-years’ time,” he says.
He says that farmers have been put in a position where they can’t afford to not have that conversation because the sector needs to be futureproofed.
“So, it’s really a tough spot,” he says.
Gent says that initiatives like AgriZeroNZ – which the bank signed on to earlier this month – are important to managing that.
“Ultimately, it’s about being a little bit brave inmarket too,” he says. “If you look at something like methane reduction, no one really knows the answer so we’ve got to start somewhere.
“We’ve got to start by having a conversation, starting to understand what science and technology is available and then figuring out what does and doesn’t work in the New Zealand farming system because no two farms are the same.”
He says you can’t assume that what works for one farm will then work for another. This, he says, makes the answer on things like methane reduction “a bit more challenging”.
Gent says that, for ASB, it is important that farmers are aware that the bank is available to assist in coming to a solution.
“I’m always concerned about those farmers who might be a little bit nervous to talk to their banks.
“We always ask that when times are tough on-farm to put up their hands and talk to their bank because it’s far easier to find a solution working with people than it is thinking you need all the answers before you talk to us,” he concludes.
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