Breeding cattle in winter sell off

The effects of three years of drought are coming home to roost, as hundreds of breeding cattle leave the district in the face of a hard winter. Yesterday, more than 3000 cattle poured into the saleyards at Matawhero after a series of earlier than usual frosts made a bad situation worse for farmers already short of feed after the drought reports the Gisborne herald. More than 600 of the cattle sold yesterday were cows in calf, a good proportion of them capital stock. With many of them leaving the district for meat works or out of town buyers, one accountant says the sale did not augur well for next year's income, especially for drought affected farmers. But there were some buyers taking advantage of the opportunity to stock up yesterday, and there were buyers from places like the King Country, Wairarapa, Waikato and the Manawatu, where conditions have been relatively easy this year.The region's overall loss of stock numbers will not be known until the end of the month, when Meat and Wool New Zealand releases its annual stock number data. A lot of the cattle being sold were stock that farmers normally expected to carry through the winter for their production income in spring.They would now likely fetch far lower prices but, from a farming perspective, if was better for farmers to offload them and look after what was left.Mr Andrew said those who had been affected by the drought and were now being forced to sell more cattle should talk to their accountant about the income equalisation scheme. Accountant Lyall Evans said people affected by the drought could use the income equalisation scheme to transfer the proceeds from any cattle sales into next year's income for tax purposes. For those who were not looking forward to much production next year, this would help reduce the overall tax burden and "keep the powder dry" in terms of cashflow.