Farm output rises at slower rate

Press, 3 September 1982, Page 17

Farm output rises at slower rate

Export receipts from meat and wool reached $2977 million in the year ending June, representing 44 per cent of New Zealand’s total export earnings, according to the annual review of the sheep and beef industry released this week. The total agricultural sector, incuding dairying and horticulture, earned 70 per cent of New Zealand’s export earnings, the Director of the Meat and Wool Boards’ Economic Service, Mr Neil Taylor, said in the review. The review noted that agricultural output increased at a slower rate during the past year, reflecting both lower farm investment and difficult climatic conditions. Costs both on and off-farm continued to be the major problem in the industry, Mr Taylor said. For example, in the year to January 1982, onfarm costs rose by 17 per cent. For the two years to January. 1982 the compound increase in on-farm costs was 44 per cent and for the last five years it was 122 per

cent. Off-farm cost increases were also severe, with lamb slaughtering charges rising 20 per cent, following a 27 per cent lift in the previous year. With the 1981-82 on-farm inflation rate running ahead of the schedule prices received, the farm gate terms of exchange index fell by nine per cent to the lowest point since 1974-75, the review said. “This serious position was relieved to some extent by the Government supplementary minimum prices which were paid out during the season.” While the volume of total farm production increased marginally on the previous year, for meat and wool farmers there was an overall decrease, particularly in wool production and this further compounded the difficult income situation. As a result, on-farm expenditure was squeezed and the volume of farm inputs per livestock unit fell to a

level 12 per cent below that considered necessary for the long run maintenance of the sheep and beef sector. The review noted that this was the second year in succession that below maintenance investment had occurred and commented that if this persisted a run-down of the industry wnuld occur. The review said the marginally lower meat production in the past year was in part a reflection of the lower lambing .percentage and more difficult climatic conditions experienced over the previous 12 months. This also affected total wool production. But, with higher stock numbers at June, 1982, and an expectation of improved per head performance, other than in Canterbury, total production of both meat and wool should be higher again in the 1982-83 season. Sheep numbers in the year were estimated to have increased by 1.1 per cent to 71 million, an all-time high. Beef cattle numbers remained almost constant.