New season meat prices solid - but offset by cost of compliance

New season lamb schedules surprise at $8.50/kg.

The new meat season's opening schedule has pleasantly surprised even the hardened old stock agents.

Independent Whanganui livestock commentator, farmer and stock agent David Cotton said the $8.50 new season lamb opening schedule was better than he had anticipated.

"Yes, this is better than I expected," Cotton said.

While meat prices are solid, David Cotton still finds something to grizzle about down on the farm.

"Old season lambs are $7.30, mutton $5 with contracts available over this level. Prime beef is holding its own at around $5. Both sheep and cattle store markets are holding firm."

Cotton said adding to all this good news is 110mm of rain at his Kai Iwi home farm over September.

"Only the third time this year we have received over 100mm in one month. We are still well behind our average rainfall for the year, but ground temperatures are good for both grass growth and new seasons lambs - all are growing nicely," he said.

"Interest rates continue to fall and I personally have always liked to pay back debt as fast as I can, but with 3 per cent interest rates it's hard to see any incentive. Three per cent interest on $100,000 equals $3000 tax-deductible versus paying the debt back, and the taxman's $30,000-plus. That pays a lot of interest, but I'm no financial adviser or expert.

"With all this good news, what can we complain about down on the farm? Even the damn weather is good. We wouldn't be good farmers without finding something to complain about, my urban friends tell me. So here are my complaints and not in any order.

"Wool – well, what can I say, it costs more to take off than what we get for it.

Freshwater reforms and compliance cost – why do I mention this?

Because there is so much good news in the sheep and beef farming industry but the reforms/legislation is taking the confidence to invest out of our industry.
"There have been some very good articles written recently about the reforms, the only trouble is it's only farmers that read them. We need our urban friends to read and understand these issues.

"I don't believe the average Kiwi understands the true cost of these reforms. With my Horizons (regional councillor) hat on we are looking at adding $15 million to our compliance budget over four years just to implement some of these new Government policies.

"If you think rates have gone up in recent years, hold on to your hat. With these costs heading our way, you will in my view drive more of our hill country into trees. I know some will say this is a good thing."