Farmers contribute much to NZ’s balance of payments and our standard of living – but some ministers don’t grasp this reality

Global  prices for New Zealand products  from the  agricultural sector, as measured on the ANZ Commodity Price Index,  have risen for eight consecutive months to hit a  new  record in May.  Prices on the world index  are  up 18% this  year, or 17% in  local currency terms.

Some  economists are predicting more  rises  are  in  store  this  year.

The  gains  have  gone  some way in the  balance of  payments to offset big losses on  the  foreign  currency  front  from the overseas tourism and   international education sectors.

Westpac senior agri-economist Nathan Penny says being a food producer has been positive during Covid-19 as people still need to eat in times of crisis.

NZ   has  also  benefited because its key Asian markets handled Covid-19 well and got their economies back up and running quickly, ensuring resilient demand for our products that is pushing up prices.

Rabobank’s latest survey has net farmer confidence sitting in positive territory at +13%, up  from +10%  in  the  previous  quarter.  In March last year the Covid pandemic pushed confidence down to -44%.

Rabobank NZ’s CEO Todd Charteris reports rising commodity prices are the key reason for optimism cited by farmers with a positive outlook for the agricultural economy.

“Since the last survey in March, dairy farmers have been buoyed by continued strong Chinese demand for Oceania-origin dairy imports which has helped maintain pricing at elevated levels. In addition, we’ve seen Fonterra announce a strong opening season forecast for the 2021/22 season of $7.25 to $8.75kg/MS, with a midpoint of $8.”

Charteris said the incremental lift in farmer sentiment came despite rising farmer concerns over government policy.

“Of the one in five farmers with a pessimistic view of the agricultural economy, 82% cited government policy as a key reason for concern.

“There are several government policies which may be causing unease among farmers, however this spike is likely attributable to concerns linked to the recently-finalised advice from the Climate Change Commission which could have potentially significant implications for NZ land use and farming systems, including future reductions in total livestock numbers.”

Charteris said worker shortages also remain a significant concern for farmers.

Normally  as  prices  rise, farmers  react by  planning  to  produce  more. Will  this  be  the  case  in  the  coming season?

There is  little  doubt the  country  needs  every extra  dollar  that  can  be  earned from export markets, since the international tourist sector  remains  on the  ropes.

But  even  though  Prime  Minister Jacinda  Ardern at  the  recent  Fieldays event  wowed the  farmers,  she  may  not have  convinced  them  that the  government is  on  their  side, or will do much to help  them in the drive to lift production.

Almost  casually,  the  government  or  its  agencies  seems determined to  make  life difficult for  those  down  on  the farm.

 For   example  Waka Kotahi’s harsh cuts to spending on rural roads appeared  to be  made so that money can be redirected to favoured projects such as the Auckland Harbour cycleway.

This means roads that keep farms supplied and enable crops and livestock to be transported for processing will be neglected so that affluent Aucklanders can cycle over the harbour on a summer’s day.

That was followed  by the  “feebate”  which puts  up  the  price of  the  farmer’s  trusty  ute  so  that  Auckland’s  upper  crust  can  get  a  cheaper  EV.

 Then  there  was the  University of Otago report on the long-term damage, human as well as economic, caused by the bungled response to the mycoplasma bovis crisis, which resulted in the culling of 171,000 cattle.

According to the report, a “badly planned and poorly executed” process led to farming families feeling bewildered, isolated and powerless. Local knowledge, expertise and pragmatism were ignored in favour of inefficient and insensitive bureaucratic processes.

While  anti-dairying lobby groups attack  the industry – their  latest  onslaught  is  over  so-called  nitrate  “pollution” – the  hard  fact  is  that  without  the more than $20bn the dairy industry earns  in foreign exchange the  country would  experience a sharp fall in living standards.

So,  as  farmers  gear  up  for the  new  season, they  will   be  searching   for   the  most effective  strategy to  improve  their  bottom lines.  They  face  rising  costs,  which  will  eat  into  returns. But  new  technologies are now  being  applied  or   tested  to offer  ways  of  increasing  production at  lower  cost.

One  of  the brilliant   new  technologies  is  Halter, a  smart-cow   collar already  being  adopted  on some Waikato  farms. It  is  the idea  of former  Rocket  Lab  engineer  Craig Piggott  who is on a hiring  drive to  increase  staff of his start-up  from 60  to 115.  The  solar-powered smart collar  is  fitted to a dairy  cow  and paired  with  an app  which enables  farmers to shift  remotely, virtually fence their  cows and monitor  their  health, feed  and behaviour. It reduces  both time  and  labour requirements, increases production, aids animal welfare  and  sustainability standards.

Farmers using  them  say  they can split  herds into multiple smaller mobs, grouping them by feed intake requirements, so cows receive precisely the right amount of feed to stay in the best condition.

A  Dunedin  innovator, Iris  Data Science,  has  developed  its OmniEye  system,  which uses  a  CCTV camera mounted on a  post  near the  exit race  from a  milking  shed. It assigns each cow in the herd a  locomotion score from  0 to 3,  ranking lameness  with 3  meaning  it needs  to be drafted for treatment immediately.

Farmers  receive an alert to  that  effect at  the  very  next milking. It’s  estimated  lameness  could  cost  some farmers  $50,000  as  lame cows’ milk  may  need to be  withheld while they are treated,  or culled  from  the herd. This  company  is  also working  on developing  deep  learning pasture  quality prediction  software.

These,  and several  other advanced  technologies,  could  put  the  NZ  dairy  industry in  the vanguard  globally of milk production at lowest cost.

As Point of  Order sees  it, the  dairy  industry still  ranks as  the  vital component  of  NZ’s  export  economy, without  which the  country’s  living standards  would be  under threat.  It  is  something  the anti-dairying lobby  groups – and some ministers in the Ardern  government – don’t seem to be  able  to grasp.