Interesting and exciting times in farming

Press, 17 July 1979, Page 21

Interesting and exciting times in farming

By

DOUG FYFE

One of the most interesting aspects of farming these days is the interest of farmers in activities which are generally regarded as being out of the mainstream of farming. The first of these is probably deer farming, which has taken off in a really big way, initially because of the possibility of exporting venison to affluent markets overseas like the Federal Republic of Germany, and more recently because of the fantastically high prices paid for velvets, apparently because of their good health inducing qualities, and here the markets are in Asia with its teeming millions.

There is also goat farming and at a recent field day on this subject the comment was heard that in the long term returns from goats producing mohair could be three times greater, and possibly more, than from sheep. Goats like deer have more than one string to their bow — apart from the luxury mohair fibre

there is also meat and milk.

There is also interest in turning the erstwhile enemy of the New Zealand farmer, the rabbit, albeit a very different animal from the wild rabbit, into a source of income from its fibre and meat, but whether this can be done so well as with deer and goats remains to be seen.

Likewise there is also a tremendous upsurge in interest in horticultural crops, like black currants and also more exotic crops like blueberries, and there are attractive reports of the sort of returns that can be derived from these too. Because of all these developments the farming industry is going through interesting and even exciting times.

Why is there this interest in activities that have been disregarded in the past? A farm adviser to whom this question was put indicated that it was because farmers wanted to safeguard their positions fh’ctuatins

fortunes they have experienced in recent 'years with the conventional products like wool, lamb meat, mutton and beef. And there is, too, the attraction as someone said at. a recent field day on goats of making the "quick buck” or dollar, as has been the good fortune of some of those who have been in on the ground floor in new enterprises, like the exotic cattle boom that preceded the slump in the beef market, which has only just come to an end. It is a little surprising that at a time when all this interest in diversification is taking place the “old faithfuls” in the farming industry are in the process of making something of a comeback. In other words, those people who are still in the mainstream of the industry —t he producers of wool, sheep meats and beef — are doing quite nicely again. However, the element of unpredictability remains there, and the wish of farmers to hedge their gets with a range of production is not hard to

understand. The recovery of wool has been quite spectacular. Up to the end of May the national average auction price for the season was about 218 c per kg, which was almost 15 per cent higher than in the previous season, but of more significance was the sort of price levels that have been reached and maintained over the concluding stages of the season. The AWASP or average weighted average sale prices have been about the 230 c per kg mark.

. When the trigger price for wool for the season now ending was set before the start of the season at 250 c per kg no-one thought that there was a ghost of a show of that price ever being reached, but, in fact, the market exceeded that point in the course of the season. Now the Government in the Budget has set its sup-

plementary minimum price for next season at 235 c per kg, which means that for the coming season, and also the one after too according to Mr Muldoon’s assurance, the average price cannot fall below that level. This is a sort of assurance that must' give a confidence to farmers that has seldom existed in the past.

The beef market, after some years of being in the doldrums which has resulted in cattle numbers being drastically reduced in New Zealand and in other parts of the world too, has taken off again in recent months. At the new level Of prices this year some fatteners on the export and domestic markets have been getting returns several times the meagre prices they paid only a little more than a year ago. These are the sort of gains that are sometimes open to farm-

ers and it is a little wonder that again there have been stories Of farmers being in the happy position of having taxation problems.

So also the minimum prices for manufacturing beef for the coming season are up by almost 43 per cent and for prime beef by 37 1/2 per cent. Lamb has been selling away reasonably well, if not spectacularly, but with the prospect of Iran wanting to come back into the market in a big way the outlook for this product cannot be other than distinctly hopeful. The one thing that has worried farmers a great deal in the recent past has been the way in which costs both inside and outside the country have eroded their returns. After Mr Muldoon’s most recent Budget one of the things that astute observers most stressed was

the new system of setting the exchange rate, which “will ensure that in future exporters’ profitability and real incomes are not eroded by local inflation.” The farmer, of course, comes within the meaning of an exporter, and so for him too this change is a highly significant One. Altogether the outlook for farming would not seem to be too bad at all.

But the unpredictability of farming remains. A few months ago it looked as though the beef market could only go one way with cattle numbers down everywhere. Yet on the American market there has suddenly developed a mystifying lack of interest in the product, and as a reflection of this since the end of May schedule rates for manufacturing beef have slumped by about a third and for other classes of beef by something less than that. The big ques-

tion Is whether this is only a temporary reaction to the high prices reached or a permanent sign that the consumer is not prepared to pay these sort of prices and there will be a somewhat lower ceiling. There are, of course, other factors at work and a plentiful supply of pork has emerged at a cheaper price in the United States.

Possibly because of the better times being enjoyed by sheep and stock farmers, in particular, there has lately been talk among some farmers, at least, of a return to a more market-oriented economy, under which the farmer would not need so much support from the State. It is easy enough to talk in this way when things are going reasonably well, but it is doubtful whether farmers will be able to maintain such a posture when things are rough again.