1979 a better than average farming year

Press, 4 January 1980, Page 6

1979 a better than average farming year

Like every farming year the year which has just finished has had its sunshine and shadows, but perhaps more sunshine than quite a few years in recent times.

The point here is that for pastoral farmers it has been a relatively good year. For farmers the weather is as important as prices for their products and for pastoral farmers. 1979 was a pretty good year weather wise. Almost throughout there was a well distributed and adequate rainfall resulting in plentiful feed supplies that saw ewes in good order at tupping with a beneficial effect on lambing percentages. Only in the last few weeks has the weather shown that it can still turn dry, but with an abundance of" feed up to that stage the impact of the dryer turn was less serious than it would otherwise have been apart from the bulk of dry material creating a serious fire risk. It has to be admitted that the rain that helped to boost autumn feed caused some problems for cropping farmers in getting in the latter part of the harvest. and at the time a Ministry of Agriculture officer in South Canterbury said that it looked like being the worst harvesting season on record. There were problems again in getting crops sown this vear and the dampish conditions also, favoured development of disease in crops, while the dry spell last month put pressure on crops on the lighter land suffering from a Jack of moisture. But many cropping farmers are also pastoral farmers, too, so have benefited from the better markets for pastoral products. According to the Meat and Wool Board’s Econo-

mic Service in the 1978-79 year, reflecting the good feed conditions, the weights of all stock' at slaughter improved with lamb carcases being o.4kg heavier, sheep up by 1.5 kg and beef cattle by about 5 kg. At the same time lamb prices improved by about 15 per. cent to an average of about $13.20, mutton prices by 1 per cent per kg, beef by a massive 64 per cent and wool at an average of 219 c per kg by 15 per cent. . For the year ended last June the Economic Service puts the average net income for sheep and beef farms provisionally at $18,700, which is up more than 20 per cent on 197778, which was of .course a drought year, and just to make the point that the position is not as good as it may seem, it is noted that the return is still 13 per cent below the per farm net income level of two years ago and in fact, after allowing for inflation, 30. per cent below 1976-77 levels in real terms. The 1979-80 season has got off to a good start although there have inevitably been a few hiccups along the way. Just as when in 1978 the trigger price for wool was set at 250 c per kg noone ever dreamed it would be reached during the following season, there was much the same feeling last year when the new trigger was set at 300 c, but by the end of October the AWASP or adjusted weighted average sale price in Christchurch was 291.13 c. When in September this price in Christchurch was

up to 272 c prices then in straight money terms were equal to the highest levels ever paid for wool in this centre in the 1950-51 boom, but “The Press” was then quick to point out if farmers were to have received in real terms then the price that they received in February, 1951, the average for the sale would have needed to be a massive 1461.64 c per kg. ' However, prices have moderated somewhat since the peak at the end of October and by the end of the year the AWASPs were back between 260 c and 270 c, but the average price for the season up to November 22 was still' almost 67c per kg or more than 32 per cent ahead of the same stage a year earlier. The other bright star has been beef. Prices surged ahead early in the year both on the export market and internally, then quite suddenly prices dropped back as there was a period of hesitance on the United States market, but the market has lately largely . recovered that loss. Lately top ste.ers have been selling at Addington market between' $7OO and $BOO and the sale of one extra large and old animal has been reported from South Canterbury at more than $lOOO. Compared with two years ago Pl steers and heifers are now worth two to three times as much and the manufacturing categories three to four times as much, and there has been a similar appreciation in values at Addington. The year ended with

lamb under something of a shadow. The prospects for it were given a real fillip in October before the start of the new killing season when the Meat Board completed an arrangement with the Iran Meat Organ-, isation for the sale of 200,000 tonnes of lamb to Iran in the next four seasons, including 45,000 tonnes'in the- current season. . Other markets were expected to react to the siphoning, off of this quantity, but so far the all-im-portant United Kingdofn market has not reacted to the deal and prices have remained static for months so that exporters have not been inclined to move their prices above the 86c per kg minimum price now guaranteed by the Meat Board for the standard PM grade lamb killing out at 13 to 16kg. Some exporters now fear, because of increasing freight costs, they may not be able to maintain for long this price level unless the market shows some improvement. Hie board has made it plain that if they cannot do that it will take over the lamb and market it itself. After last season’s relative industrial peace in the meat industry, there was an unhappy period at the start of the new season when the Meat Workers’ Union struck for a week in the course of award negotiations and until their new award was settled at the end of November they held up the settlement of' conditions for killing for Iran with the employment of Muslim slaughtermen; an action that did not seem to give much weight to the importance of this market to the country's economy. The long battle by farmers, through the Meat Board, to secure a foothold in the freezing industry in Canterbury reached a climax during the year when the Government declined to allow the board to proceed with the purchase of shares in N.C.F. Kaiapoi Ltd. owners of the freezing works at Kaiapoi, ■ at ■ $7 per share, but finally in what would appear to be

a happy compromise the deal was allowed to go ahead with farmers working in association with a processor and exporter with a high reputation, who -has a meat processing' plant only about three kilometres away from Kaiapoi —C . S. Stevens and Company Ltd. There was another ripple on the surface of the meat industry —it was perhaps rather a wave — when Waitaki NZ Refrigerating, Ltd, gave notice of its intention to ship' meat to Europe on the Belgian ABC line which is outside the conference of lines with which 1 the board has an agreement. to service that part of the world. This amounted to a challenge to the board’s powers to control shipping of meat, which was one of the main reasons why the board came into existence in 1922, and it intervened to prevent the company doing this, but its powers in today’s circumstances are to be tested by the company in court. While all this has to do with the mainstream of the farming industry, in the last year or two farmers have been looking increasingly at new activities that might spread their risks, and in the process there has been phenomenal growth in deer farming. Attention has also.been directed to goat farming, opossum farming, rabbit farming, milking of sheep for cheese production as well as production of horticultural crops like black currants. There is interest, too, in energy farming and the Government is clearly interested in getting private companies involved in a commercial scale enterprise using fodder beet to produce ethanol. Increased fuel costs are a major item among continually spiralling costs that remain a constant threat' to the profitability of farming. Just before the end of the year processing costs at freezing works were raised by some 15 to 22 per cent, but happily there was no immediate adjustment of schedule rates.