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Colin Hurst
Will the good times last? That's one of the key issues to come out of the latest Federated Farmers confidence survey.
It shows that while right now most farmers are making a profit, 39% of dairy farmers are expecting a downturn. That's opposed to only 18% sheep and beef farmers who think that things will get worse.
Feds president Colin Hurst says this come at a time when profitability is the highest it's been in a decade, with the survey showing 72% of farmers are making a profit, with fewer than one in 20 making a loss.
That, he says, is an incredibly positive result, adding that just a few years ago high interest rates, low commodity prices and sky-high input costs were making it really hard for farmers to earn a living.
"Now dairy, sheep and beef farmers are getting strong returns again, meaning farming has been one of the main bright spots in an otherwise sluggish economy," he says.
But Hurst says confidence has started to wane and there is genuine uncertainty in the sector. He says the three main concerns of farmers are rising farm input costs, regulation, compliance and red tape, and thee potential result of the upcoming election.
He says the rising cost of fuel, fertiliser, freight, insurance and other costs are ratcheting up faster than returns, meaning profit margins could be eroded.
"Worries about commodity prices and weather, such as a potential El Niño-driven drought, are well back at 12% and 11% respectively," he says.
A key concern to come through in the survey is the plight of the arable sector, which supplies seeds, grains and feed for the country's livestock industry.
Hurst says it's deeply concerning that only one in five arable farmers are making a profit.
"The current conditions lifting the pastoral sector are not reaching our cropping farmers and that's bad news for all of us," he says.
Hurst says for political parties wondering what farmers want most from the Government, the clearest single instruction is to finish what has been started.
Mid Canterbury Federated Farmers arable chair, Bevan Lill, said Beef + Lamb NZ data indicated that for the last six years, the average arable return on investment was about 0.8% while inflation ran about 4% - so the average arable farm was going backwards at about 3% a year.
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Will the good times last? That's one of the key issues to come out of the latest Federated Farmers confidence survey.
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