The dilemma of farming the hill country

Graham and Shelly White share a dilemma facing many middle-aged Kiwi couples on large, specialised sheep farming properties today. The Whites farm Willow-lea, a 600ha property on rolling Otago hill country at Hindon, between the Taieri and Strath Taieri Plains. They run 3500 Perendale ewes and depend on their wool and lamb cheques for their economic survival.  The Whites pride themselves on a low-cost, low-input operation.  As Graham explains, the dilemma facing the majority of the country's sheep farmers is that they are making a 1.5-2% return on their investment. That's why a lot of their peers are leaving the industry reports the Straight Furrow.The global financial crisis has compounded the problem and may be the last straw that puts many debt-loaded farmers out of business. Farming is a cyclical business and she believes the fortunes of the sheep industry will turn for the better. But the couple is realistic about how long they can continue to run such a large property on their own and have given themselves another two or three years. Their son was working on the farm, but declining returns in the past four years meant they couldn't afford to keep him and he left to pursue a career in the farm service sector.Like many farming families, ideally the Whites would like their son to take over so they can retire to a smaller holding down country, but buoyant land prices and big business have pushed that option out of reach."Places up here and in a lot of areas are selling way above what they are worth," Graham said. "You'd be better off putting your money in the bank. People are selling out to dairying, moving here and buying at prices much higher than the productive value of the land."A whole generation of young farmers has been lost to the industry because they cannot afford to pay the interest on a big mortgage from farm income alone, he said."There is no way this place would generate the money for (our son) to borrow on a mortgage."