Fieldays sales lift brings smiles

By Owen Hembry

Gallagher's Mathew Macfie says farmers are spending more money on high-end technology. Photo / Christine Cornege
Gallagher's Mathew Macfie says farmers are spending more money on high-end technology. Photo / Christine Cornege

Fieldays wrapped up for another year on Saturday with plenty of talk about farmers spending money but a sense of caution hanging over the event.

In a report last week BNZ economists described the event as a bell-wether of the wider agricultural scene.

Conditions across the sector were better than a year ago and cashflows appeared strong enough to allow both increased spending and the repair of balance sheets, the report said.

Ken Walsh, managing director of John Deere dealer AGrowQuip, said that this year's show was more positive.

"Just like chalk and cheese."

The expected upturn was going to be slow coming but it looked like it had started, he said.

Mike Whitty, general manager of marketing at Ravensdown, whose products include fertiliser and animal health, said sales on the first day of the show were double those of last year.

"Farmers are pretty happy this year and I think that's a big step up from where we were last year," Whitty said.

"I think people have been conservative because debt levels have been pretty high, you need to pay back the bank of course and that's important and that is certainly something that we haven't finished doing," he said.

"But everything's looking positive for the coming year so that frees up a bit of money to start spending and investing in their properties."

A Ministry of Agriculture and Forestry forecast last week picked that sector income would rise from $4.5 billion for the year ended March this year to $6.9 billion in 2015.

The estimated export value for the year ending June for dairy, lamb and beef would be up 23.5 per cent, 9.7 per cent and 8.1 per cent respectively at $13 billion, $2.7 billion and $2 billion.

Dairy farmer Phil Vandy said people were wearing "half a smile". The dairy payout was looking good.

"But the next year we don't know so you don't get too brave and go out and spend too much money on things."

Hawke's Bay sheep and beef farmer Brian Willis also said the atmosphere at Fieldays was more positive but the sector was cautious about spending.

"We've [sheep and beef sector] been flying backwards the last four years ... borrowing money hand over fist and just waiting for it to turn," Willis said. "We're very lucky it's turned now."

Reserve Bank data shows agriculture sector debt was $47.2 billion in April, down slightly from $47.3 billion the previous year.

BNZ economist Doug Steel said: "Relative to income, relative to normal inflation and, or growth that's [debt] certainly going backwards in real terms."

But it was likely there was both debt repayment and new spending happening right now, he said.

Reserve Bank data showed deposits from the agriculture sector with banks were $6.4 billion in April, up from $5.6 billion the previous year.

Gallagher Animal Management regional sales manager Mathew Macfie said the company had its biggest first day at Fieldays. While it seemed quiet there were probably more big ticket items being sold, he said.

"Farmers are spending money on not so much the little widgets but the high-end technology stuff."

Last year farmers were buying what they had to and could not afford to look ahead too much, he said.

"They're now able, I think, to look forward maybe for the next five years ... they seem to be investing a bit more in the future."

- NZ Herald

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