The results of the January Federated Farmers farmer survey have recently been published and makes fairly sober reading - especially in the context that prices for most commodities are reasonably sound.
Only 5.1% of respondents expected economic conditions to improve and but nearly 46% expect economic conditions to worsen, this is the worse result since July 2009.
Given the recent rises in milk prices and solid returns coming for sheep and beef farmers this level of pessimism is somewhat surprising and perhaps is a reflection of where farmers heads are at rather than a measure of what the ‘true’ economic conditions are. Apart from taxes, one thing nobody like especially in business, is uncertainty and it is coming by the bucket full in the last few months.
For dairy farmers, the still unresolved issues around the Fonterra balance sheet was probably the start and coincided with the M.Bovis outbreak. The Trump-versus-China impasse and the ongoing saga with Brexit are also contributing and then we get to the domestic situation.
Farming, and in particular dairying have been under continual pressure from what most feel is the general public, although I suspect it is more of a very vocal minority and increasingly the government is ratcheting up the rhetoric regarding the environment footprint of farming. The latest impact is the threaten introduction of a Capital Gains Tax, among others.
In the mean time the usual uncertainties that any business has to contend with are still there and these range from staffing issues to the increasing compliance costs and requirements etc etc, and then we have the spectre of climate change. The survey was done in January and while the GDT auction prices had been on their upward trend, Fonterra hadn’t updated their farmgate forecasts and so dairy farmers, which provided the gloomiest outlook, if they were surveyed again today would probably provide a (slightly) more up-beat response however the underlying mood of farming does have a lot to be concerned about.
The key messages coming out of the survey were; Global uncertainty; A drop in profitability especially in dairy and arable farms; An increase in farm expenses (this came especially from the sheep and beef sector who incidentally were the most positive of the sectors surveyed).
Almost 90% of all farms have debt and most predict it to increase particularly the ‘dairy and other sector’.
Farmers said the highest government priority should be on the economy and business and consistent with all surveys since July 2017 the biggest concern is on compliance and regulation costs. Concerns over the ETS and climate change have levelled out and one area that has decreased is concern over the political situation.
The attitudes of the public psyche is constantly-shifting territory and this was brought home to me in a report out of Gisborne regarding the discovery of 14 leg traps, not the long spring gin traps, on Kaiti hill. There is no confusion that the setting of traps in this area is inappropriate. Above the old Kaiti freezing works, which is an area now with bars and cafes it is a bush covered hill but very close to residential areas and pets and public alike. The ‘bit’ I found of interest was the terminology used around a possum that was caught in one of the traps, “Biosecurity officers were called to euthanise the injured and distressed animal”. It would have not been long ago that the possum would have been dispatched and barely a mention made of it.
The trend now to apply somewhat emotive terms to what would have to be one of if not the major introduced pest in New Zealand is interesting and an attitude livestock farmers need to be well aware of with their farming practices.
When ‘sympathetic’ language is being applied to possums then practices like tailing and dehorning cannot be far away from coming under increased public scrutiny. Urban attitudes are fickle and constantly moving ground, but in recent years the speed of change, especially as applied to livestock and agricultural systems is taking some keeping up with.