Meat & Wool NZ have released their 2008/09 movement in input price report which reveals input prices rose 7.6% for the year. Whilst this was down from the previous year any increase in costs in these tough economic times is hard to bear. The main driver was the cost of fertiliser which was up by nearly 34% but fortunately this rise has now halted with the world economy taking the sting out of demand. The falls however have not matched the last years rises. Other major items to rise included local Govt rates by 5.6%, repairs and maintainence 8.9%, and shearing expenses 14.7%. On further analysis the shearing increase was more about farmers changing from shearing twice a year to once a year shearing so total money spent may well be less. Some significant price decreases were seen to balance those increased costs and were seen in the interest and fuel areas. Many farmers would have welcolmed the fall in their overdraft costs and some who interest term fell due, would have some relief on mortgages as well. The overall price in interest on debt fell by 6.7%. Fuel, a significant cost for many, also came to the party dropping by 14%. Overall on-farm inflation was double the CPI and one wonders whether this is a carry over of the dairy boom the year before. If it is we should see a significant fall in many costs next year, although some costs such as fertiliser, with a high imported influence, will be harder to control.
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