Our uncertain future

By Carmen Hall

2 comments


Last year Rick Powdrell received $127 a head for his lambs. The current return has nose-dived to $85.

The Bay of Plenty Federated Farmers meat and fibre chairman says inconsistent returns have created uncertainty in the industry and only time will tell if that scenario will be repeated next season as sheep numbers decline.

Stock has taken a hit because of the drought and the effects will be felt well into the future. "The drought will factor into lambing percentages as ewes won't be in as good condition. When you get fewer lambs, the meatworks haven't got the input, so it compounds, and there is some debate at the moment if there will be a procurement war so the prices go up," he says.

A Rabobank rural confidence survey showed 50 per cent of beef and sheep farmers thought their businesses were "just viable" or "unviable". The report said they lagged considerably behind their dairy counterparts in terms of confidence, investment intentions and self-assessed viability.

The bank's New Zealand chief executive, Ben Russell, says the survey results accurately reflect the mood of sheep and beef farmers, given the very tough business conditions they have faced over the past year.

"Sheep and beef farmers are understandably despondent that, after a more positive couple of years, on-farm returns have again fallen sharply," he said.

Good farmers have kept themselves going by productivity gain, but the drought, lower returns and higher costs have impacted on sheep farmers, says Mr Powdrell.

"The key concept when looking at sheep and beef farming is over many years, not just 2012, the returns have not been good. It would be like me saying to you: Do you think you could survive if you were getting 40 per cent less income? This is why many farmers are saying their businesses are unviable."

Mr Powdrell runs 2000 ewes on his property but used to have more than 3000. He is a firm believer the industry will sort itself out. But he queries the amount of debt being carried by farmers today.

"Each generation that is coming through is more indebted as we are not getting the good years. My father made good returns and could reduce his debt.

"For instance, in 1951 during the wool boom, it was worth $51 a kilo compared to $3 a kilo on the marketplace. Can you imagine us getting that today?"

- Hamilton News

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a5 at 28 Jul 2014 22:29:03 Processing Time: 531ms