Learning to cope and only worrying about things you can control are ways some farmers face up to the many challenges their businesses face.
In this article Bryan Holden talks about breeding for weather hardiness genes, and AgResearch has just announces technologies that will help recognise animals with worm resistance. These are just two little long term ideas that will improve the productivity of the flock and herds in the future.
However, to invest long term you must survive short term, and B&LNZ figures show at the current exchange rates some farmers will struggle to do so. It was interesting to remember back to the recent times when dairying was facing a profit crisis of its own, due to a low predicted payout. How did they handle that situation that is similar to what many sheep and beef farmers are being faced with today?
The Dairy Industry extension service ran nationwide seminars and shed meetings that were well attended by many in the industry. Trimming the costs and handling the high debt were lessons learnt by dairy farmers, and that would be most useful for sheep and beef farmers today. A positive realistic approach is needed, and B&LNZ should lead this.
Outspoken Taranaki farmer Bryan Hocken is urging industry leaders to drop the doom and gloom and start being positive reports The Taranaki Daily. The former Taranaki Fed Farmers president was horrified by Beef + Lamb NZ's prediction that gross farm revenue in the Taranaki-Manawatu area will drop 4.3 per cent because of lower returns from sheep.
Mr Hocken, who runs 2500 ewes, 900 hoggets and 600 cattle on his 450-hectare property at Tarata, east of Inglewood, said NZ's marketers were letting farmers down. "The marketers need to get out and change things. Farmers are getting left behind because the marketers can't market our product. We need to know what they're doing in the markets and what the markets want."
Mr Hocken said only biotechnology and better genetics had kept many sheep and beef farmers from going into receivership. Mr Hocken's son-in- law, banker-turned- farm assistant Jarred Coogan, said that, like the weather, the exchange rate was out of farmers' control.
But Taranaki Federated Farmers meat and fibre section chairman Neville Wallace, of Hawera, still blames the exchange rate for farmers' woes. While the kiwi continued to increase, lamb returns would remain on a downward slide, he said. "Farmers can cope with climatic conditions, but it's this man- made exchange rate which is preventing a financial economic recovery."
55 Comments
We need to know what they're doing in the markets and what the markets want."
This is an interesting statement. One of the things the market wants is traceablity. Yet farmers have fought electronic ear tags tooth and nail. Overseas buyers want to trace their food back to the farm and want to know if their food is produced sustainably yet this is the very thing farmers resist. The dollar is currently low against the Aussie dollar so why can't we compete with them? A weak dollar equates to a weak economy. Muldoon economics have gone. NZ Govt debt is low so why should our dollar be low? Oil is our second largest export. If you paid low prices for farm land it would make a profit on investment.
All this doom and gloom stuff is completely overdone. 3 years ago yes, but prospects for the current season and beyond are really good. There are worldwide shortages of lamb and beef which will get more pronounced as herd/flock rebuilding further shortens supply into the medium term.New markets particularily in Asia opening up rapidly. Farmgate prices are very stong at the moment lamb at $6kg, beef over $4 and even old ewes selling in excess of $100 in the saleyards. While these prices will ease as supply comes on stream post xmas there is no reason to believe that falloff will be sudstantial given demand.Even wool is showing signs of emerging from its coma about 40% up on last year at present. Most sheep farmers down south here that I talk to are quietly confident at the moment.
Are these prices caused by farmers selling stock to each other or are they genuine export price high prices that come from optimism and nothing else? I doubt if many Asians want to eat a leg of lamb.
Most of the worlds production has some kind of Govt subsidy so it will always be hard for us to compete.
Because of climate change and other reasons the world will plunge into a food crisis of unprecedented extent. Under such a scenario I doubt if beef and lamb on the world markets will be a) affordable b) demanded c) sustainable.
Therefore prices for meat products in general will drop further, while production costs rise.
More western nations turn increasingly rather into "Potatoes Cultures".
Overall I think the NZ agriculture industry (meat/ milk) needs to be flexible and has to be very careful what they are producing. Among others affordability, protectionism and climate changes are the biggest influential players.
These prices are genuine market prices. Infact processors are paying out a smaller proportion of the market price than they were last year. Prime lambs in Australia are selling in excess of $A200, if you read the press coming out of there its akin to the dairy boom here a couple of years back. The US cattle herd is at a 36 year low and falling.Ditto Argentina Pork prices are at record highs. Grain prices have spiked on the Russian grain ban and all the subsequent flow on effects to livestock/milk production. Dont get sucked in by the noise look at whats really happening and its all good for NZ! The Chinese have numerically the largest sheep flock in the world so we dont need to educate them at all, indonesia has come from nowhere to be our second biggest beef market this year. Its all happening Skeet but you just keep beating that doom and gloom drum. And by the way my cattle are all electronically tagged as is now mandatory for cattle to be killed from 1/10/11.
These prices are genuine market prices.
Hahahahahaha! Sucks to be in the rural real estate game now, huh Sheep Shagger? Only a little while ago you thought you ruled the world! Now look. It's all coming apart at the seams. But that's the problem with poorly made junk. It does that.
Spuds are a high-country item.
They came from the mountains of South America. Below I think it's 800 ft, they accumulate disease, which is why folk at sea-level have to buy replacement stock. I think the kiwi supply comes from the hills above Methven, someone here will know more.
Our block goes from 5-800 ft, clay-based and on the acidic side. So far (5 years) no need to refresh stock.
Take a look at how high those tiered paddy-fields are (to be sure, it must be Ireland). Anything is doable, with the very important proviso: that you have the energy to do so.
SS stop talking about your self. Have a closer look what people have in their grocery basket/ trolley in the supermarkets. The majority is and will be for a long time on a tight budget and not only here in NZ.
Restricted buying power of the masses certainly changes consumer behaviour, while on the other hand a smaller, rich minority can afford exclusivity. The providing markets have to adapt.
I understand Sheep Shaggers argument and have some time for it. Some farmers are doing extremely well, and the export prices for meat are pretty damn high at present. Wool is rising also. However I am more in favour of Powerdownkiwi who understands the limiting factors we face.
If the population grows to 9 Billion or more, the oil will be too expensive for us to farm as we do, fertiliser will be at a premium, and throwing superphosphate around to sustain our sheep and beef might not be a profitable excercise at that point.
So all in all I think SS is playing denial, we have major problems. The hill country in areas I know are not getting the fertiliser applied. Unlike chicken and pork, us grass farmers havent really brought our costs down, and we are faced with inflating static costs and large debts. Its a slowly growing emergency. Despite high current commodity pricing.
Malarkey, I am not and will never be a real estate agent. I farm sheep and beef as my exclusive income stream. I am clearly bullish about the prospects for the industry based on my own research, surely not a crime. Kunst 92% of our meat is exported and the aim is to target the" rich minority" and help earn a living for not only ourselves but contribute to NZinc as well. I dont disagree with the notion that crops like potatoes, grains will be important in feeding the world but most people enjoy abit of meat with there tatties.
By the way Kunst I think you nailed it. Its all about our customers, and they just cant afford to pay us a fortune for our products. The best year I remember was about 2000 when our currency was very low. I often get asked for meat. People just cant afford it. They wont eat lamb coz its outa reach. We have laws to stop those folk killing it on farm. In doing so saving themselves heaps. The world is mucked up. We kill all these little lambs, yet left to grow into a hogget not only do they taste a lot better, the nz palate loves young mutton, but it cant be bought for love nor money. Who wants wishy washy lamb when you can have a big juicy mutton chop... ridiculous.
What if we got $200 for a hogget, or $250 for a bigger 2th. Would that mean we could winter less ewes, farm our lambs through for longer and make more money. Perhaps winter more cattle... If I put a roast mutton on, anyone near the house starts drooling, the aroma is divine. Why oh why cant the marketers of our meat not succeed with this product.
Quote: Kunst 92% of our meat is exported and the aim is to target the" rich minority" and help earn a living for not only ourselves but contribute to NZinc as well.....
When I read sentence like that, nothing is more important to add: Please, read and understand my articles in correlation to others of my comments.
SS in the current difficult times described earlier, sooner or later you will experience how world market behaviours are dramatically changing.
Kunst. Look I dont necessarily disagree with your point of view or the likes of powerdownkiwi,looking long term. The world is on an unsustainable path. I detest the rampant consumerism of this age and believe we will be judged harshly by future generations and rightfully so. I believe farming free range livestock for meat and fibre on hill country is comparitively sustainable certainly in the short to medium term. As conditions adapt so will we and if that means growing spuds on terraced faces then thats what we'll do. I also think that whilst peak oil is a threat there is also huge potential to develop alternative energy sources. Witness the solar powered aircraft on the telly a few weeks back and the potential of thorium as a clean fuel to name a couple. Whilst in no way claiming to be a scientist I do however have faith that that fraternity will create some answers given enough lead in time. I guess thats the key variable.
Yeah CO, just flurries and acouple of inches but absolute blizzard conditions. As cold of a windchill as I can recall. In the middle of lambing so praying that it will pass through quick smart but not looking forward to the rounds tommorrow. The slinky man will be busy im picking. Just goes to show that for all the debate here re economic matters we farmers are more effected by the weather than markets or exchange rates. Hope the cows are ok.
SS Slinky man will be doing well out of dairy farmers in our area too as calving hasn't finished. An issue which is probably an unforseen one is the continuation of Edendale not picking up milk. No pick up for two days and they hope to resume tomorrow. You can imagine the problems that is causing especially with snow on the ground. When there was no power a week or so ago farmers used gennys to run their plants and continued milking. Tankers picked up milk. Now we have power, snow and no milk pickup. Ah, as you say the weather rules our lives more than anything. Good luck with your lambing survival rate as I hear that the weather will have the odd lull, but it's snow etc until Wednesday.
I recommend everyone interested in agriculture, making a living of it and willing to make some plans for the future, to read link below:
Walter, farmers and those who live/make a living off the land have been living with and adapting to, climate change since time began. As Sheep Shagger said on an earlier post the weather has always ruled our lives despite what some shiny suits might like to think. We are an adaptable lot. :-)
Hopefully we are adaptable to Climate Change situations. As we all experiencing weather events are more severe. The question is if we can cope with increasing bills (not only for farmers) under Climate Change, before we make changes. Massive devastation, huge loses and expensive cleaning up seems almost daily life activities around the globe. It seems to me currently food production in some sectors is already under massive pressure.
Farmers are adaptable, as to the rest of the population, I can't say. ;-)
I don't agree that we are experiencing more severe events in NZ. If you access old farmers diaries you will see that there has always been periods of 'dry summers' (these days called droughts) and winter freezes. These have usually being cyclical. My father has been keeping farming dairies for 70years (& still keeping them) and if you go back through them you will usually find a weather pattern similar to what we are experiencing, whether it be a summer dry or a freezing winter.
I grew up in the Waikato and clearly remember baking summers and winters so cold that the water troughs would freeze over. These were common occurences.
A key difference today is that 'weather' seems to have become an industry all of it's own that every man and his dog wants to be telling us about. Predicting the weather is a bit like predicting earthquakes - the predictions are only as good as the data being interpreted and the skill in understanding that data by the person interpreting it.
Neither are 100% foolproof. You and I agree on one thing Walter, the key is sustainable practices and you might be pleasantly surprised just how much of that is going on in farming - you just don't get to hear about it. :-)
"Farmers are adaptable, as to the rest of the population, I can't say."
Farmers do whatever they think will maximise their margins, secure in the knowledge that no matter what they won't be permitted to go under and that the rest of the population is underwriting them.
Farmers and business owners have to be adaptable to changing circumstances . And that includes being quick on the tootsies , regarding the whims and vagarities of politicians . One never knows when a plonker 'like Jim Anderton will come along and munt your industry ( i.e. forestry ) for reasons quite illogical .
Bravo to those entrepreneurs who can survive and profit !
What I often hear/ read from other people even experts are arguments from history books of any kind placed into the current time – how short- sighted !!
As far as I understand since the 21st century the world has changed and is fast changing for ever not only for part of the world, but for the entire globe.
Never in the history of human, are we on the verge of disrupting even destroying natural life / nature. Never in the history of human worldwide economic, political, cultural, social and environmental problems accumulated and intensify to such a degree. Never in the history of human are these events so closely correlated to each other.
If we like it or not we need visionary ideas and a fundamentally new economy approach/ strategy. An orientation based purely on customer demand, free market economy etc. (economic growth) isn’t sustainable, leads to uneconomic growth means only accelerate the destruction of our planet.
Farming: CO not what I hear, but what I see and experience in the Canterbury/ Marlborough region and others is far worse then history books.
I would much rather be facing the problems and challenges that we have today in 2010 (they seem mild in comparison) than to be facing the abyss of hardships that our parents, grandparents and great grandparents faced beginning in 1929. If you want to look for a period in human history that posed the greatest threat to worldwide economic, political, cultural, social and environmental matters, it was that train wreck of a period that started with the stock market crash of 1929 and ended some16 years later with tens of millions of people from all over the world, including New Zealand, dead. That was the time of the greatest peril that humanity has so far faced in its recorded history, not now.
Climate change, if it is real, is gradual. There is time to plan and prepare. Peak oil, when it comes, will not happen overnight. Again there is time to plan and prepare. But I do wish peak oil would hurry up and get here. I remember vividly being taught in school back in the 60s and 70s that when the world's oil runs out in 2010 New Zealand would be - rhymes with trucked. Better remind myself of that the next time I fill up.
My previous comment was obviously deleted (not understood properly), so let me say this:
The world is on a tipping point. This is generally still not acknowledged. Following the current path what we call - economic growth, will increasingly involve heavy and expensive repair jobs on all fronts of life - hardly affordable for us, but far worse for the next generation.
Reading your comment David just confirms - there is not much time left for plans/ preparations.
Didya get deleted , Walter ! Being a potty mouth again ? If you swallow hook-line-and-sinker the Hickey diet of doom and gloom , you will indeed think that " the world is on a tipping point " .
An alternative view is that the world has never been perfect , during the tenure of Homo sapiens , but that this is the best era to be alive in .
And that storm clouds have always been present upon our horizon . Most of our problems are either imaginery or solveable . Pick for yourself where to slot " climate-change "/ " peak-oil "/ H1N1 virus / earthquakes / noodle crop failures .
“]Economic growth causing increasingly heavy and expensive repair jobs on all fronts of life – hardly affordable for us, but far worse for the next generation”
Perhaps you could offer us some concrete examples of these increasingly heavy and expensive repair jobs from the last 20 years or so, kunst? After all, modernity has been with us for quite some time now and the matters of which you speak are hardly new.
No - David don’t twist what I wrote: Following the current path what we call - economic growth, will increasingly involve heavy and expensive repair jobs on all fronts of life - hardly affordable for us, but far worse for the next generation.
Often driven by lobby groups and greed, most worldwide economies are still a decade away adapting sustainable “economic growth”.
Just for you David: http://www.actionbioscience.org/environment/worldscientists.html
By the way one of my favourite sites - a lot to learn.
Thanks for that link; I'll read it with great interest.
Thank God for economic growth, that's all I can say, because without it the Thames River in the UK would still be a filthy cesspool, Boston Harbour in Massachusetts would remain America's most polluted and barren harbour, and I don't think we would see a wind turbine for love nor money.
Kunst, Marxism as a tool for creating a workers paradise on earth failed because it fundamentally did not understand human nature. Your arguments about why we urgently need to engage in massive societal upheaval (revolution?) to create an economically sustainable future (workers paradise?) strike me as somewhat similar in that they fail to somehow grasp something very fundamental about humans. I don't mean that to be rude, but that's just how I respond to what you say.
It is amazing what other people can fantasize and put in others people mouth. David you are so far off what I’m writing. Read more of my comments, put them in context – think – and then comment.
I don't mean that to be rude, but that's just how I respond to what you say.
Whether climate change is attributable to mankind's activities or not , expect politicians to use it as an excuse to tax the populance in a novel , new way . And to what end ? Sadly , not to fix the pollution " problem " . But to fill in the monster black holes of unfunded retirement pensions and healthcare costs of the retiring baby-boomer generation .
Dairy farmers of NZ beware ! Just as Labour in Australia are re-attempting the super-profits tax on the mining industry , National in NZ may line you up too , as our super-profit industry .
The golden goose is about to get a right old plucking .
Some unhappy Fonterra farmers out there GBH over shifting the goal posts on the DIRA . Might be the pollies that get a plucking :-)
There's a quiet determination out there in the hinterland that hasn't being present for a long time. If we farmers get plucked, it won't only be our feathers that will be flying.
Doom and gloomers should bear in mind that we are entering an inflationary period sooner or later and money will devalue and prices rise whatever happens. I was surprised by sheep shaggers claim that pork was at good prices and see it is in fact at record prices in the USA where demand has picked up. Doom and gloom has at best been delayed.
A friend in Madrid spain on a visit reported no sign of doom. Here in Finland property prices are still rising even while unemployment is fairly high but touch wood demand continues to pick up from the collapse of last year. And the ECB has already shown that if places like Ireland default they are going to buy bonds and do whatever it takes to keep people spending money even if they have to lend directly to the public and sideline banks altogether as per Bundesbank head Axel Weber.
Yes Andrew, I agree. The path of least resistence is to inflate the debts away. There is only so much austerity that the masses will tolerate. It will be interesting to see what happens as the election cycles roll around in some of these countries. Not sure how that will play out for us? Commodity prices up but maybe but so to the NZD?
And what do you think inflating the debt away is, but austerity by stealth? The only difference being that it penalises those that have provided for themselves through savings, as well as rewards those who have spent us into this mess with their debt. Frankly, I doubt that it's going to be an 'inflate our way out of this ' mark 5, otherwise why would places like the UK be going down the debt reduction road? It's because they take the view that this time our aged populations do not have the capacity to replace their savings base if they're inflated away; time has caught up with the Wetern World ( including Japan; where has all the trillion upon trillions of yen that has been QE'd got them? Certainly not inflation!). Inflation, if it eventuates, will just create a Western populace of abject poverty.
Weird ain't it ! After 3 years of arguing over the likelyhood of rampant inflation ............. or the counter-argument of a deflationary spiral into depression .................. all we get are little blips of inflation . Where's all those soothsayers now ? ................ Hickey , where you at , laddie !
In it right up to my yummy gummy bummy , Wally . Making a right little Gummy-Piggy of meself ............. Whilst the brushbeaters of doom ( i.e. Chicken-Little Hickey ) continue the wailing of the banshees . Keep spooking the folks witless , Bernie , suits me just fine ....
A wee stumble in the market , is to be expected from time to time . But there sure-fire is a heck load of moola sitting on the sidelines , earning bupkis ! 2 % to loan to Uncle Sam ......................... shag that for a joke . A rental in Invercargill makes more cents than that !
I never thought a Gummy Bear would forget how steep that downslope was in 08....now you go do your homework and look at the plunge post the sucker's rally after 1929....all it takes is a puff of wind up a Wall Street rear end and away she blows. No good all that "stop loss" bollocks when no buyers exist. Look for p/e falls down to 5 and lower...when the cnbc screaming dies away and tumbleweed is rolling down Wall st...then is the time to buy the best of the best.
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