Ouch!
OPINION: Your canine crusader notes that the Reserve Bank forecasts that more than 80% of beef and sheep farmers would be unprofitable if any future emissions pricing on carbon dioxide equivalent hit $150 per tonne.
Cashflow pressures on dairy farmers are expected to rise in the 2015-16 season, with about 80% of farmers - representing almost 90% of sectoral debt - expected to have negative cash flow, says the Reserve Bank.
This is despite allowing for some reduction in farm working expenses, drawings, and interest rates.
About 49% of the dairy sector had negative cashflow in the 2014-15 season, the Reserve Bank says in an updated assessment of dairy sector vulnerabilities released mid December.
"Despite some farms with high debts facing considerable difficulties, most farms are expected to remain viable over the medium term," the report says. "Losses for the banking system as a whole are estimated to be manageable even under a severe stress scenario for the dairy sector."
The Reserve Bank carried out stress test modelling which assumes that banks continue to lend to farmers in negative cash flow unless the loan-to-value ratio is above 90% and future periods of positive cash flow appear unlikely.
"The vast majority of dairy farms remain viable under the base stress scenario, with non performing loans rising to 7.8% of original exposures by 2018-19. The worst case scenario features a slow recovery in the payout and a sharp decline in land values, resulting in non performing loans increasing to around 44%," it says
"While this scenario presents a highly challenging environment for the dairy sector, our results suggest that losses for the banking system as a whole would be manageable."
As at June 2015, dairy debt reached $37.9 billion, representing around 10% of total bank lending.
South Waikato farm manager Ben Purua’s amazing transformation from gang life to milking cows was rewarded with the Ahuwhenua Young Maori Farmer award last night.
Bankers have been making record profits in the last few years, but those aren’t the only records they’ve been breaking, says Federated Farmers vice president Richard McIntyre.
The 2023-24 season has been a roller coaster ride for Waikato dairy farmers, according to Federated Farmers dairy section chair, Mathew Zonderop.
Ministry for Primary Industries (MPI) director general Ray Smith says job cuts announced this morning will not impact the way the Ministry is organised or merge business units.
Scales Corporation is acquiring a number of orchard assets from Bostock Group.
Family and solidarity shone through at the 75 years of Ferdon sale in Otorohanga last month.