Not so fast – Rural News:
Predictions that NZ’s farming sector is in for a bumper year need to be put into context.
While many primary sectors – including dairy, horticulture and red meat – are experiencing record commodity prices, a number of factors are leading to some even bigger cost increases, which will mean less on-farm profitability.
As Rabobank NZ’s analyst Emma Higgins recently opined, “Rocketing input costs and crimped production in some regions will not translate into new benchmark profits”.
This is due to a number of reasons: the ongoing impact of Covid, the war in the Ukraine, growing inflation and the imposition of government-imposed regulations – to name just a few.
Even though NZ is reaping record prices for its primary exports, the country’s current account deficit “exploded” (the BNZ’s word for it) in calendar year 2021 to the equivalent of 5.8% of GDP, or $20bn. The previous year the annual deficit had been only 0.8% of GDP.
Economist Cameron Bagrie said the current account deficit didn’t get the attention it deserved. The BNZ’s economists, noting there had been a very big change in a short space of time, said the deficit is the largest since 2009.
“It continues a rapid widening of the external deficit that we have been warning of for quite some time. The deficit is now getting to a level that some in the market and/or rating agencies might start paying attention to.”
Whether the government, preoccupied with Covid and rising inflation, is paying any attention isn’t clear — but it should be. Some insiders believe it is beavering away on climate change measures that could have a damaging effect on farming morale—particularly if the government goes ahead with measures as proposed by the Climate Change Commission to reduce methane emissions by cutting cow herds by 15%. . .
Otago pulls out the stops on its most insidious pest – Jill Herron:
When the rabbits spill off Otago’s land and on to its sea lion, seal and penguin-populated beaches, you know there’s a serious pest-control problem
For the first time in years – so many no one wants to put a number on it – non-compliance notices have been served on Otago landowners for letting rabbits run amok on their land.
A further 40 notices ordering immediate action or costly consequences are set to follow, as a shake-up in the pest department at the Otago Regional Council (ORC) last year starts to bear fruit.
Environmental implementation manager Andrea Howard, who has been in the role less than two years, concedes the ORC has had a “less than active stance” on the rabbit front and that this would have contributed to current numbers. . .
Two global leaders in agriculture are helping advance world-first pasture technology designed, tested and made in New Zealand.
Investment from Gallagher and the Royal Barenbrug Group will fund wider farm roll-out and faster development for Christchurch-based Farmote Systems, company founder Richard Barton says.
Launched in Canterbury last spring, the Farmote System is a unique new way of automatically recording precise, consistent and reliable pasture data, 24/7. It now covers over 6000 hectares of farmland.
“We’re excited to have attracted new investment from Gallagher, as well as further investment from Barenbrug,” Richard Barton says. . .
A Kiwi company has secured a US export contract to supply one of New York’s tallest skyscrapers with its wool flooring product.
The $1.1 billion Brooklyn Tower will be home to hundreds of the city’s elite and will stand at 327 metres when it opens later this year, making it one of the world’s tallest residential buildings.
The new contract will see Bremworth supply over 3,000sqm of wool carpet for the 93 storey, supertall skyscraper and is one of the company’s largest ever installations of its natural fibre product in the US.
The North American deal is the highest profile commercial contract for the company since Bremworth’s wool carpets were used in the refurbishment of dozens of US retail outlets owned by Cartier, the luxury French jewellery maker. . .
Dairy giant Arla warns of supply issues unless farmers paid more – Emma Simpson:
The UK’s largest dairy has warned milk supplies could be under threat unless its farmers are paid more.
The managing director of Arla Foods said costs are increasing at rates never seen before and that farmers can no longer cover their expenses.
“Because of the recent crisis, feed, fuel and fertiliser have rocketed and therefore cashflow on the farm is negative,” said Ash Amirahmadi.
He added farmers are producing less milk as a result of the higher costs. . .