Carmen Hall: I am sparing a thought for our farmers and hoping the headwinds will change

Bay of Plenty provincial president Darryl Jensen says despite a good season, they are "running to a standstill". Photo / Mead Norton

OPINION

There is no denying rampant inflation and the rising cost of goods and services are hitting Kiwis in the pocket.

Farmers are no exception and it must be incredibly frustrating for them considering dairy, beef and lamb exports are performing well in overseas markets.

Primary industries are a big contributor to New Zealand's economy and are used to cycles. Traditionally, when they hit an upward swing it allows them to pay down debt and pump money back into much-needed on-farm maintenance and capital expenditure.

But not this time.

Federated Farmers Bay of Plenty provincial president Darryl Jensen says despite a good season, they are '"running to standstill".

He is not alone.

Federated Farmers Rotorua-Taupō provincial president Colin Guyton believes the "hurt is coming for farmers".

For example, his feed bill has gone up by $130 a tonne, adding an extra $30,000 to $40,000 to the budget alongside fertiliser costs that had more than doubled.

Farmers, says Guyton, have been around long enough to know the payouts can - and will - drop.

Beef + Lamb New Zealand chief economist Andrew Burtt says on-farm inflation was 10.2 per cent for the year ended March 2022 - the highest it's been since 1985-86 [13.2 per cent].

Since that analysis, fuel has increased 23 per cent [from March to June] and fertiliser increased 8 per cent over the same time.

Farmers have also faced increased prices for contractors, tradespeople, machinery and parts for operating farm infrastructure and vehicles due to a tight labour market and increased import shipping costs, he said.

Ballance Agri-Nutrients confirms superphosphate is now about $490 a tonne compared with $315 two years ago; while diammonium phosphate has skyrocketed to $1800 a tonne compared with $799 two years ago.

They also warn further price hikes are inevitable.

DairyNZ budget case studies of eight New Zealand farms show that over three seasons [2020-21 to 2022-23 forecast] milk income is up $1.19 per kg of milk solids.

The organisation's boss, Tim Mackle, says: "However, farm working expense increases up $1.06 per kg of milk solids is eroding most of the milk price gain."

This is a lot of data to process but no matter which way you spin it, the outlook looks grim.

Farmers are a resilient bunch but there is only so much pain they can absorb before it takes a toll both mentally and financially.

So, I am sparing a thought for our farmers and hoping the headwinds will change and escalating costs will take a nosedive.

Our economy may well depend on it.