The past week has seen a number of things that will have an impact on sheep and beef farmers' incomes, and their industries, says Manawatu/Rangtitikei Federated Farmers Meat and Fibre chairman Tony Gray. And he doesn't think it bodes well for farmers. He said, after having good prices last year for beef and lamb, he thinks the recovery is going to be short-lived despite the continued firm prices in the market place reports The Manawatu Standard. "Given the current exchange rates with the US, pound and euro, the average price for lamb may be closer to $70 than the $88 last year and beef $689 compared with $816 last year," he said. He does not expect the New Zealand currency rate to move much from its current US70 cent high, although exporters would like to see it come down, and many financial pundits expect the value of the kiwi to fall. Mr Gray said Treasury is reporting that New Zealand is over the recession, so the longer-term outlook for interest rates is that they are likely to increase. "So where does that leave the profitability of the sheep and beef sector? In the hand of the world's currency traders." Mr Gray said a number of decisions would have an impact on farmer's incomes. "The first was the result of the Meat & Wool New Zealand Commodities Levies Act referendum. Mr Gray said it was indicated in the levy proposal document that more than half of the wool levies were to be spent on market development and access. "These two areas have had millions of dollars spent on them in the past, with little or no return. Farmers have had enough and they voted out the levy for wool." Unfortunately, he said, there were other areas funded by the wool levy and areas, such as research and development (inside the farm gate), shearing and wool-handling training, and sheep improvement will no longer be funded. "It will also mean that there is little or no chance of getting any money from the Government's Primary Growth Partnership, as it is a dollar-for-dollar contribution." Mr Gray said the Emission Trading Scheme (ETS) Review was published hard on the heels of the Meat & Wool referendum.The Review Committee recommended an ETS is preferable over a carbon tax, because it can link with other schemes internationally to track the international price of emission units.
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