PGG Wrightson Revenue Tops $1.1b as Profit Jumps 46%
After delivering a strong financial year, rural trader PGG Wrightson says the coming months will depend on customer confidence and weather.
His comments come as fears grow about what affect the El Nino weather system may have on the primary sector, and in this case on the unpredictable challenges facing fixed wing and rotary pilots applying fertiliser and spray on properties.
Weir says people are now starting to think seriously about El Nino which traditionally brings dry conditions on the east coast and strong winds and rain on the west coast.
Fertiliser companies are already telling farmers that they should expect greater variability in the weather and fewer ideal application windows. This warning is already being taken seriously – especially it would appear by owners of larger farming operations who are placing orders for fertiliser well in advance of when they may be needed.
According to Weir, farmers need to engage early with his members to be ready for what may evolve in the coming months. He says farmers need to book in early and also be aware that it may take longer than normal to get fertiliser applied because of high winds.
“The other thing that will come into play this season is on-farm facilities and, in the case of fixed wing aircraft, airstrip access and serviceability are key. Have you got a bin and is it dry and weatherproof and can you put your fertiliser in it and have it stored through two or three weeks of showers and wind?
“This is important so that we as an industry can make the most of the narrow weather windows we are expecting to see. In the spray game, with helicopters and fixed wing as well, the spray windows are going to be narrow,” he says.
Weir says they are asking farmers to be patient and understanding given the conditions that are likely to prevail.
He says some farmers have their eyes open and are thinking of going early, realising they need to get fertiliser on before it gets too dry. He says if they get fert on soon and soil does dry out, it will be there and ready to be effective when the rains come.
Demand for Fert
Weir says overall his members are seeing reasonably strong demand for late winter, early spring nitrogen applications.
He says the weather event that went through the Wairarapa recently probably dulled that somewhat. But he says there is certainly plenty of demand to get fertiliser on now and build up good supplies of feed for what looks to be strong lambing percentages.
“But effectively we are in a market that is still very much in the recovery from the downturn,” he says.
The price of fuel forms a large part of the cost of aerial spraying and topdressing, but Kent Weir says farmers understand the need for a fuel surcharge. He says most realised that when the Middle East crisis is resolved, prices will return to some normality.
“Right now, what we are asking from our customers is to understand that as an industry we are operating in some very narrow windows. Whilst it might be fine at your place today, the chances are that we are still trying to get through the stuff that was ordered and we were supposed to do last week."
