Despite what business confidence surveys say, the NZ economy is plugging along steadily and city-dwellers may not have noticed how well the farming industries have been doing.
ANZ economists, surveying the country’s primary industries this week, talked of “elevated returns” at the farm (or orchard) gate.
They say global economic concerns are yet to be felt in the regions, with commodity prices generally very strong at present. Export prices for dairy products have steadily increased with the GDT price index gaining 24% since early December, and the ANZ team is forecasting a $6.40/kg milksolid price for the current season and a $7.30kg/MS price for next season.
They also note returns for export lamb have been very favourable, with China now the largest market for NZ lamb and mutton (though they say a disorderly Brexit could be disruptive for the trade to the UK and European markets).
ANZ reports industry confidence varies between sectors. High debt levels in the dairy sector are curbing positive market sentiment. Finding staff, particularly seasonal staff, is a challenge in all agricultural and horticultural industries. Top of mind issues at present for many within the dairy industry are debt repayment and investment in on-farm infrastructure to meet regulatory and consumer expectations.
On the other hand, as Point of Order discovered on a visit to our old stamping grounds in Southland where farmers have their debt levels well under control, the region is prospering. Established dairy farmers are doing very nicely, thank you.
In Southland, agriculture’s share of GDP is around 20%, or double that of most other regions.
With Southland being the country’s third largest dairying region (after Waikato and Canterbury), there has been linear annual growth of more than 12% in milk solids and the dairy sector is contributing nearly 20% of the province’s GDP. At Edendale, the Fonterra co-op is said to operate the world’s largest dairy site in terms of volume produced.
It’s not surprising that Southlanders think of themselves as leaders in the farming industries (though they will concede that the climate and soils on the Southland river flats may have something to do with the high productivity).
The interesting development in Southland agriculture, in an era when methane emissions from cows are top of the agenda for climate change warriors, is the expansion of the vegetable- growing industry. Southland is now the base of two major firms, Pypers Produce Ltd and Southern Cross Produce, supplying carrots, potatoes and parsnips, not just for the domestic market but for many countries abroad. The returns per hectare are said to be phenomenal (far ahead of those for either dairy or meat production) and farmers are queuing up to lease some of their most fertile paddocks to Pypers or their rivals.
If sustainably produced vegetable exports provide an answer to a hungry world while shutting down carbon emissions, then Southland may be on to an even more remarkable winner than it has so far enjoyed.
Moreover, the region seems to be future-proofing itself against the violence feared by farmers in Australia, where vegans have been embroiled in a major wave of animal rights protests.
Aussie farmers are taking to social media to vent their fury at protesting vegans, as the politicians tell them to arm themselves with video footage and complain to police if activists storm their properties.
One of those making his voice heard is Burrumbuttock Hay Runners founder Brendan Farrell — who takes donated hay to drought affected farmers — who posted a strongly-worded video statement on the protests.
“Vegans are going bananas. Blockades left, right and centre. Flinders Street Station is in chaos. Abattoirs chained up, people locking themselves up here, there and everywhere,” he said in the video.
“I am just gobsmacked with some of the bulls**t that’s coming out these people’s mouths on what they are trying to achieve.”
Southland perhaps is prudently preparing to avoid the wrath of the vegans should similar protests be organised in this country.
Point of Order 