The d word

April 17, 2010

The Oamaru Mail has headlined the d word: Drought declaration looms for Otago region.

We had a short, sharp downpour on Thursday which has taken the pressure off us but we’ve got irrigation, scale and diversity.

It was a very localised rain and even those who got as much as we did will still be facing some tought decisions if they’re dryland farming.

North Otago has been dogged by droughts since farming started here – and no doubt before.

This dry is unusual because it’s taken so long for public acknowledgement.

When there wasn’t much irrigation, all farmers stopped spending when the weather got dry and it didn’t take long for the town to fell the impact.

I think now there’s now enough irrigation to keep the money flowing into Oamaru so the town hasn’t been affected the way it was in the past.

We look across green pasture to dry paddocks in the distant and are grateful we’ve got irrigation. It must be hard for those on the dryland looking back the other way as they run short of feed and have to face up to quitting stock.

There was a dusting of snow on the Kakanui mountains yesterday morning. It was gone by lunchtime but it’s a sign that temperatures are dropping so even if the region gets more rain soon, it will be too late for pre-winter growth.

One good thing about the decrease in the sheep population is that there is plenty of space at the freezing works so farmers needing to reduce stock will have somewhere to send them.

Lambs are selling for about $75 dollars and ewes for around $55. Two year old beef cattle are fetching about $950.

It may not be a fortune but it has been much worse.

When the ag-sag of the 80s coincided with a drought some farmers got bills when they sent stock to the works because transport and killing charges exceeded the value of the animals.

PS Contact details for the Rural Support Trust which helps rural families facing an adverse event – climatic, financial or personal – are on this website.


A new breed of rural women

October 15, 2009

Some women are rural by birth, some by choice and others like me become rural by marriage.

It’s now more than a quarter of a century since I took on my farmer. Back then it was the norm if you married a man of the land to follow him to his land regardless of whether or not you could follow your own career in the country.

Now, many younger women place a much higher value on their right to follow their chosen path then my contemporaries and I did. But some still find that they can’t have it all. It isn’t always possible to follow their careers if they follow their hearts and find themselves on a farm too far from a city for commuting.

Irrigation has brought farmers’ offspring and other young people back to our valley for the first time since the ag-sag of the 1980s. Some are women coming home to farm, more are men and many of them have  brought partners or wives with them.

Among them are intelligent, well-educated, confident young women with established careers and some find they aren’t able to carry on working in their chosen fields.

Improved communication through texting and the internet mean they aren’t as isolated as they would have been a decade or two ago. It helps that it is no longer unusual to have women working as stock agents, fertiliser reps, vets and in other positions which were once regarded as “men’s jobs”. But the women who choose farmers still have to adapt to a different way of life in the country.

They aren’t martyrs, though. Some take an active role on the farm, some find other ways to use their talents in paid work and in the community.

The theme of this year’s International Rural Women’s Day, which is being marked today, is rural women at the heart of innovation.

The new breed of rural women is living proof of that.


Meat prices positive but costs up too

June 15, 2009

 Westpac and National Bank forecasts both paint a positive picture for meat in the next couple of years.

The only threat to meat prices appears to be the exchange rate, but the National Bank, in its Rural Report publication, said there was no reason the New Zealand dollar should stay high given the country’s high debt, large and ongoing current account deficit, and low to no economic growth.

It forecast two years of easing to about US49c before increasing to US60c.

Lamb prices have defied predictions of doom even in the face of a relatively high dollar, partly because of a drop in the ovine population after droughts in Australia and here. The large number of dairy conversions in the past couple of seasons have also led to steep falls in sheep numbers.

While supply has dropped, demand has been steady or risen.

The reports say the sheep meat industry should enjoy good conditions for two more years at least.

The reasons behind this season’s high prices – low lamb numbers, a weak pound against the Euro making UK lamb exports viable, and strong retail sales – should remain.

Farmers would also benefit from meat companies competing for lamb.

Some commentators were expecting a decrease in dining out as the recession bites to dampen demand for lamb but it appears any drop in orders from resaturants has been more than compensated for by increased sales at supermarkets as people rediscover the joys of home cooking.

Beef prices are a little more uncertain although reduced numbers after a big kill in the USA last season and on-going drought in Argentina will impact on supply.

Prices are only one half of the business equaiton and while they have gone up so too have costs.

Meat and Wool Economic Services survey of sheep and beef farm input prices show on-farm costs in the past year went up by 7.6% in the past year.

The biggest rise was in fertiliser which went up 33.8%;local body rates increased 5.6%; interest rates dropped by 6.7% and fuel prices dropped 14.2%.

The overall cumulative on-farm inflation for the five years to March 2009 was 32.2% and over 10 years on-farm inflation rose 50.4%

That compares with consumer prices which increased by 16% over five years.

If interest is excluded the underlying rate of on-farm inflation in the past year was was 10.7 per cent compared with 9.8 per cent for the previous year.

dairy 10003


Who Benefits from Subsidies? – corrected

May 9, 2009

A post on Anti-Dismal about who gets what from agricultural subsidies concludes the biggest gains go to the landowner. * corrected below

That is backed up by this paper by Chris Nixon from NZIER which says that product prices are capitalised into land prices.

The findings Anti-Dismal points to, indicate it doesn’t matter if they are real market prices or ones artificially inflated by subsidies.

However, if the impact of the removal of subsidies and the ag-sag which followed that is any indication,  subsidies benefit those who depend on farmers too.

When subsidies were removed after the 1984 election, farmers were brought kicking and screaming into the real world and many feared there would be a mass exodus from farms. Farm values fell – adding credence to the view that product prices are reflected in land values – and some people were forced to sell, but most hunkered down and learned to stand on their own feet.

However, when the subsidies went, farmers’ incomes fell,  they stopped spending and jobs were lost downstream. The worst effects weren’t felt by farmers but by the people who processed what they grew, worked for, contracted to, supplied and serviced them.

If the removal of subsidies hurt those downstream more than farmers, they must have benefitted from subsidies too.

Correction: * Paul Walker points out in a comment below that it was the farmer not the landowner who benefits most.

Since it’s now two days after I made the original post, I’ll address that in a new post.


Royal Show to go

May 1, 2009

If the Canterbury A&P Show was under threat, agriculture in New Zealand would be in a very sorry state.

What then does the demise of the Royal Show at Stoneleigh in Warwickshire say about the state of agriculture in Britain?

If the collapse of Lehman Brothers and the fire-sale of Merrill Lynch were powerful symbols of the end of the City as we had come to know it, then the demise of the Royal Show, the premier farming event of the British calendar at Stoneleigh in Warwickshire, is a totem of the end of our countryside.

A&P Shows in New Zealand had some pretty lean years in the wake of the 80s’ ag-sag but most have done better in recent years, partly as a result of better farm incomes but also by adapting to attract urban people with little or no knowledge of , or interest in, farming.

Fortunately not all British Shows are under threat and those which are thriving:

. . . aren’t anymore about red-faced, burly farmers looking for a new bull and horny-handed sons of toil trading harrows. . .  They have an obligation, if they are to survive, to entertain as well as to trade. And, sad as it may be for those who have farmed the land for generations, that is a rubric for the countryside itself.

If farming is in terminal decline . . . then other uses for the countryside have to be developed and encouraged, beyond building new homes across swathes of it. And that requires both imagination and a new covenant between town and country.

As matters stand, the two are more estranged than ever. . . The new appointment of the South Downs as a National Park only serves to show how the Government believes that rural beauty is to be corralled, rather than integrated in to the rest of our economy. As a nation, we need to decide what we want from our countryside.

They also need to decide how much they’re prepared to pay for it. Farming certainly isn’t in terminal decline in New Zealand and is probably better placed than other sectors to withstand the recession. One of the reasons for that is that we were forced to enter the real world in the 1980s in contrast to our British counterparts who are still dependent on subsidies and find they and their incomes are governed by political whim rather than their markets.

But although we’re standing on our own feet there are still people and groups with strong views on what they want from and for our countryside and who want to tell us what to do and how to do it.

There is some comfort in the knowledge that the government has a better understanding and appreciation of farming than the previous one because here, as in Britain,  farmers are very much a minority and the rural-urban gap is very wide.

That’s one of the reasons that A&P shows are important, not only are they a  measure of how farming is doing, they’re also a plank on bridge between town and country.


Country rentals attracting crims

April 7, 2009

When jobs on farms and in farm servicing went in the 80’s ag-sag so did the people who’d done them, leaving empty houses.

The houses were offered for rental and the hard working people who’d been part of their communities  were sometimes replaced by people who moved to the country knowing they wouldn’t get work and who supplemented their benefits with criminal activity.

Otago police warn that this is happening again.

Const Tremain said criminals, or others, who wished to evade the attention of police for whatever reason typically targeted rural and semi-rural locations.

“The isolation and a smaller police presence are the main reasons, and they will take advantage of rural folks’ general good nature in order to get what they want.”

The shorter turnover of lifestyle properties has been exacerbated by dairying which has a high staff turnover so we don’t know our neighbours or our employees as we used to.  

We’ve had thefts of fuel and k-line irrigation pipes and a vehicle taken – but recovered – in the last couple of years and some calves went missing last spring.


Saving makes more cents than spending

March 5, 2009

Spending our way out of a recession is a theory most farmers have difficulty getting our heads round.

Those of us who survived the ag-sag of the 80s are haunted by memories of interest rates going above 20% and have no intention of jeopardising our businesses and the jobs of our staff  by spending any more than we have to.

We are mindful that when we stop spending the impact is felt beyond the farm gate. The money from the dairy boom flowed into towns and now the white gold rush is over, the people who service and supply us are losing business.

The ODT reports  that Humes in Alexandra have made 15 staff redundant because of a fall in demand for the water troughs and cattle underpasses they make.

That’s a lot of jobs in a small business in a small town but none of the dairy farmers I’ve spoken to are in the mood for the sort of expansion which would generate the demand to provide work for those people.

When money is tight saving makes more cents – and sense – than spending.


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