Income down for many farmers in Northland

Farmers can only look back wistfully at the record payments for milk and meat in 2001-02 as their income continues to shrink while the New Zealand dollar increases in value.

Income for the average Northland dairy farmer, down $77,000 in the past season, is forecast to fall a further $7000 to about $250,000 this financial year, according to the North Monitoring Report for July 2003 released by the Ministry of Agriculture and Forestry.

The average sheep and beef farm in the region made about $201,000 last year - down $54,000 on 2001-02 - and MAF forecasts that revenue will drop a further $13,000 this year.

Northland has 1500 dairy farms, with 405,000 cattle. The "average" farm in the MAF report is a 102ha family unit wintering 218 milking cows and 64 replacement heifers.

The report says the industry average milksolids payout (net of levy) for the year ending next May is forecast to rise to 378c/kg of milksolids because higher international prices for dairy products will offset the effects of a stronger dollar.

However, the end-of-season payment for this year would be only 27c/kg compared with 60c/kg in past years. "The effect on total milksolids income via the drop in July and August payments will not be made up by the small forecast increase from $3.30 to $3.40 within-season advance and the forecast 3 per cent increase in milk production," the report says.

Cull cow prices were predicted to be similar to 2002-03, but calf prices were forecast to fall from an average of $92 last season to $76 this year with a reduced demand for bull calves.

The cash surplus on the average dairy farm was forecast to increase by only $500 to $87,000 in 2003-04, but while the payout drop had been hard for farmers to swallow the report says most of them are still optimistic about their industry.

Northland has 2310 grazing farms stocked with 468,000 beef cattle and 522,000 sheep. The "average" sheep and beef unit in the MAF report is 314ha wintering 2980 stock units.



Income reductions are also forecast for the 30 Northland farms carrying a total of 23,000 deer. Their revenue dropped 36 per cent to an average $125,000 each last year and is expected to fall another $9100 this financial year as a result of lower venison and velvet prices.

- NZPA