Get ready for the ‘now’ norm
Get prepared for a ‘Now Normal’ future, says Ian Proudfoot – Global Head of Agribusiness for KPMG – discussing the likely effects of COVID-19 in the months to come.
Federated Farmers national president Katie Milne told Parliament’s Epidemic Response Committee that: "winter is coming" for the sector – and not just the freezing weather.
She told MPs the double whammy of the drought and reduced capacity at meat processing works meant many farmers were carrying into the colder months more stock than they would wish, and feed was very tight.
Milne said winter, in another sense, was the dampener on primary produce prices that would likely stem from world economies crashed by the virus crisis.
"Meat that was getting $5-something a kilo is now bringing in $3, if we can get it off the farm. The milk returns (per kg of milk solids) had $7 in front of it this year, but there are predictions next year it will be $5."
While the sector was working as hard as it could to keep things going, "farming will not come out of this unscathed," she told the committee.
Milne added that Feds also had particular concerns about the lockdown impacts on businesses downstream of producers and growers, which help keep farming running every day – "the suppliers to the guy who fixes the hydraulic pump, the guy who imports the tractor tyres".
She also sounded a warning about the potential for signalled government regulation in the environmental space to reduce agriculture’s earnings at a time when farmers - and the nation - can’t afford it.
Milne pointed out that research done by agriculture sector agencies and Local Government NZ suggested the impact of the Essential Freshwater package, if not modified, could cut agricultural earnings by 10-30% in some regions.
If pause was pressed on those regulations "that wouldn’t kick the can down the road" on progress because farmers were already underway with a host of environmental initiatives and work streams, she said.
