Dairy power
OPINION: The good times felt across the dairy sector weren't lost at last week's Beef + Lamb NZ annual meeting.
Flying hours for aeroplanes are down from 5,800 hours in the third quarter of 2020 to 3,725 hours in the same quarter in 2024.
Tony Michelle, executive officer of the NZ Agricultural Aviation Association, says the situation remains depressed for the sector, with some ag aviation companies laying off staff and smaller operators amalgamating in a bid to reduce costs and stay afloat.
He says for those doing dairy support work, including helicopters, there was some upsurge in activity in spring because of cold wet weather in some places with farmers needing to get nitrogen on to get the grass growing.
"So, we had a bit of a flurry around that and with sheep and beef returns supposedly on the way upwards, there is some hope for the future," he told Rural News.
However, he notes that the latest statistics from Beef + Lamb New Zealand (B+LNZ) show that profitability for the average sheep and beef farmer will be down $4,000 in the coming season. He says the other thing that's starting to hit operators is the cuts government made to its budget last year. He says the other thing that's starting to hit operators is the cuts government made to its budget last year. He says the reduction in government spending will particularly affect helicopters that do a lot of work for government agencies such as conservation.
"Another other big thing is land use change, which is a double-edged sword. Initially, helicopter operators do the prep and support spraying and then of course the work stops. I think the Government's move to restrict the planting of forests on productive land is almost a case of shutting the stable door after the horse has bolted," he says.
Michelle says it's estimated the maintenance level for phosphate on South Island hill country is 15 kg/ha. He says pre-Covid the amount applied was 9kg/ha and it's widely known that no fertiliser has gone onto hill country in the last three to four years.
"So, the cost of bringing that land back into full production may be prohibitive. The reality is the choice may be to let it be used for forestry or for farmers to open the gates, as it were, reduce the stock units on that land from four to two and graze it," he says.
Besides the lack of work, the other problem facing the ag aviation sector is the cost of maintaining their aircraft. Michelle says the cost of operating the PT6 engine, commonly used in Cresco and Airtractor aircraft, has increased and is expected to rise even more in the future. He says the cost of parts has gone up by 28% in the last two years and is about to go up another 6%, and a further 8% from here on.
"As a result, an operator must set aside an extra $100,000 a year to maintain their aircraft. This is in addition to rises in the price of fuel, insurance and other levies. What worries me is that some operators seem oblivious to what's happening, because I don't want these costs being passed onto the farmer," he says.
