Rise In Farmers’ Costs Last Year

Press, Volume CVI, Issue 31322, 18 March 1967, Page 1

Rise In Farmers’ Costs Last Year

Sheepfarmers’ costs rose by 3.2 per cent last year, which is the highest annual increase since 1955, according to the chief economist of the Meat and Wool Boards’ Economic Service, Mr W. L. Keen. Over the last decade the costs of these farmers have increased on average by 19 per cent.

The Economic Service reviews the prices of goods and services used in production on sheep farms in January of each year. The percentage rises or falls in price are calculated for some 140 items. “Two-fifths of the total increase was due to the rise in the price of phosphatic fertiliser—the effect of this was mitigated by the fact that the price of other fertilisers and lime did not rise, and the cost of seeds actually fell,” said Mr Keen. “Another two-fifths of the over-all increase was due in almost equal proportions to wages, repairs and maintenance, rates and depreciation.” Between January of last year and January of this year the group of items comprising fertiliser, lime and seeds rose in price by 8.6 per cent, rates by 8.1 per cent, insurance by 7.5 per cent, and railage and cartage by 4.4 per cent. The cost rise was slightly above average on the more intensive farms where fertiliser comprises a relatively greater proportion of the total farm expenditure, and

slightly below the average on the more extensive sheep farms. “With generally falling prices for and wool since 1964, the sheepfarmer is facing the cost-price squeeze in real earnest,” says Mr Keen. “His only defence is the possibility of holding down costs per unit of production through increased technical and managerial efficiency. That there is still ample potential for increasing productivity is shown by our survey, but this requires, among other things, the investment of more capital, and farmers in times of lowered net incomes will not have sufficient profit to plough back, nor may they wish to increase their indebtedness unless they can see brighter prospects ahead.”