Drought prevents farming optimism

Press, 31 March 1989, Page 11

Drought prevents farming optimism

By

DAVID LUCAS

The drought was preventing farmers in the east coast regions of the South Island and North Island from sharing in a resurgence in confidence in farming, according to the latest farm monitoring report prepared by MAFTech.

Buoyant wool prices, a 15 per cent lift in the beef schedule and rising lamb prices had improved the confidence of sheep and beef farmers.

In moist regions there was a sense of buoyancy, although farmers had little confidence in the state of the economy in general or the meat industry, said the report. But drought-affected farmers were still despondent. They had been unable to capitalise on the lift in lamb prices because the drought had either forced them to quit stock earlier in the season or to arrange grazing out of the region. The average lamb weights and prices for lambs from farms on the South Island’s east coast were well below normal levels.

However, in Southland farmers were receiving about $5.60 more than similar lambs were worth last season: prices in the north of the North Island were $4 to $5 higher than last season, and in the central and east coast regions of the North Island prices were higher than had been expected. Livestock in drought areas was still in light condition and farmers were trying to maintain capital stock at the cheapest cost. Lambing percentages were expected to reduce because of light weights of ewes at mating.

Some farmers who had attempted to grow their lambs to heavier weights were having to stop them at unsatisfactory weights because of the lack of feed.

The drought had shattered the hopes of arable

farmers who had wanted an average or better than usual season. Crop yields were down an average of 20 per cent. In spite of substantial increases in grain prices, most arable farmers would suffer cash losses this financial year and there was expected to be a greater demand on seasonal finance next year. The report said many sheep and beef farmers were quietly confident about prospects for this year, based on the improvement in prices, but were either cautious or even slightly pessimistic over longer-term prospects.

The state of the meat industry was a big concern. Farmers were uncertain whether the recent improvement in lamb prices was a result of market returns or the effect of competition between meat companies attempting to gain market share.

Farmers were also worried at the effects of the non-payment of stock if a works failed.

High prices of dairy cattle were making it hard for new sharemilkers to enter the dairy industry and for existing farmers to increase cow numbers, said the report. The high level of optimism in the industry had led to high prices of stock and a steady rate of conversions to dairying. Farmers were expecting final payouts of $5.50 to $6 a kilogram of milkfat, an increase of 40 per cent on last season.

The national production of milk is expected to be down 2.5 per cent, mainly because of a wet spring in dairying areas.