Government's New Planning System, PC1 'Won't Mesh Together Well'
Waikato farmers have been told that the Government’s new planning system legislation and the region’s Plan Change 1 (PC1) “won’t mesh together very well”.
Although rising fuel and fertiliser prices are taking some shine off the record returns, farmer sentiment remains high, he adds.
Dawkins was commenting on a Beef + Lamb NZ report showing total on-farm inflation was flat for the second year in a row.
The on-farm inflation rate was -0.9% in the year to March 2026. This follows a 0.6% fall in 2024-25.
The overall result was driven by a fall in interest rates which account for 18% of total farm expenditure and is the largest single expenditure category for sheep and beef farms.
Fuel and Fertiliser Costs Cloud Outlook
Dawkins says that while the reported drop in on-farm inflation is most welcome, it doesn't cover the post-Iran conflict period.
"The subsequent price rises in fertiliser and fuel are taking some shine off the record returns," he told Rural News.
"However, the sentiment in the sheep and beef sector remains very high with farmers making hay while the sun shines.
"Investment in deferred maintenance, short term debt and new technologies means farmers will be more resilient should these costs continue to rise or schedule prices drop."
Underlying Inflation Continues to Climb
The B+LNZ Sheep and Beef On-Farm Inflation report provides a detailed analysis of the changes in farm input prices and their impact on farm expenditure, offering valuable insights for farmers developing their budgets.
The findings come at a time when sheep and beef farmers are experiencing record returns and continuing strong international demand for New Zealand red meat.
B+LNZ chair Kate Acland says there's no doubt the red meat sector is in a stronger position than we've seen for somee time.
"But while revenue has improved, we know that input prices are moving just as quickly. The focus now is on building resilience for whatever comes next," she says.
The annual report does not cover the impacts of the conflict in the Middle East. The Strait of Hormuz closed on 28 February, leading to sharp increases in fertiliser and fuel prices.
In the year to March 2026, the report shows that when interest is excluded, underlying on-farm inflation rose 3.9%. This exceeded the Consumer Price Index (CPI) increase of 3.1% for the same period, meaning that most farm input prices are rising faster than general consumer prices.
The price of fertiliser, lime and seeds increased by 8.1%, the report shows. These products are the second largest farm expenditure category, accounting for around 15% of total expenditure.
There were also increases in rates (up 9.2% in the year to March), electricity (up 7.1%) and fuel (up 3.1%).
Strong Demand Supports Outlook
With interest rates forecast to rise later this year, Acland says that on-farm inflation is expected to increase in 2026-27.
"Farm input prices are significantly above pre-2021 levels. Over the past five years, cumulative on-farm inflation has increased by 30%, compared with 25% for CPI.
"However, the continuing strong international demand for the high-quality meat and wool that New Zealand sheep and beef farmers produce means our farmers are well-placed to meet increasing input prices.
"They will need to remain vigilant to ensure they are maximising the value of all farm inputs."
