Thursday, 22 January 2015 09:41

The upside of falling fuel prices

Written by 
Fuel Pump - Image by Boegh Flickr.com (cropped) Fuel Pump - Image by Boegh Flickr.com (cropped)

Federated Farmers believes that the continuing fall in fuel prices should result in lower farm input costs.

 Petrol and diesel pump prices have declined by more than 40 cents per litre since October.

Federated Famers transport spokesperson Ian Mackenzie, says he expects the persistent decline in the cost of fuel to be reflected in farm expenses.

“The direct expenses of running machinery are accounted for with a lower fuel bill for the farmer. But there are other high fuel use industries, in particular transport, where we would expect to see some reduction in the costs from now on,” he says.

“We have spent years seeing the rates we have to pay for transport of stock and equipment go up, because of escalating fuel bills. Now petrol and diesel are going down, then the cost of these services should also go down.”

Mackenzie says fuel prices are so influential that prices and charges of farm costs generally should be expected to fall.

“For farmers this means expenses in their downstream processing should reduce, and so should the prices we pay for physical inputs, such as fertilisers, but also for agriculture chemicals, and contracting.”

Mackenzie says the lower fuel prices are currently one of the few short-term reasons for farm optimism.

“Most of the country is getting seriously dry and production has or will fall.  Dairy farmers have been hit with low payout prices, and sheep farmers are struggling with the dry and low store stock prices.  But eventually it will rain and so too will the prices paid for our products rise again.”

“In the meantime, low interest rates, a lower dollar and now lower fuel costs and their flow on effects, should in combination help farmers weather what could be a difficult year.”

More like this

Working with farmers to ensure best outcomes

OPINION: Recent media commentary from Southland Federated Farmers has raised concerns among our rural communities, particularly around Environment Southland’s approach to winter grazing inspections and nitrogen reporting. But let’s be clear, much of what’s been said simply doesn’t reflect reality.

Editorial: Nitrate emergency?

OPINION: Environment Canterbury's (ECan) decision recently to declare a so-called “nitrate emergency” is laughable.

Federated Farmers slam Canterbury nitrate emergency

A shameless political stunt is how Federated Farmers is describing the Canterbury Regional Council decision to declare “a nitrate emergency” on the back of its latest annual groundwater quality survey.

Featured

Tributes paid to Jim Bolger

Dignitaries from  all walks of life – the governor general,  politicians past and present, Maoridom- including the Maori Queen, church leaders, the primary sector and family and  friends packed Our Lady of Kapiti’s Catholic church in Paraparaumu on Thursday October 23 to pay tribute to former prime Minister, Jim Bolger who died last week.

Meet the Need: Helping Kiwis put food on the table

Meet the Need, a farmer-led charity, says food insecurity in New Zealand is dire, with one in four children now living in a household experiencing food insecurity, according to Ministry of Health data.

National

Machinery & Products

» Latest Print Issues Online

The Hound

Red faced

OPINION: The Greens have taken the high moral ground on the Palestine issue and been leading political agitators in related…

Cold comfort

One of the most galling aspects of the tariffs whacked on our farm exports to the US is the fact…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter