Taranaki farmers face uncertain outlook despite grass growth after drought
The grass may be growing again in the drought-stricken coastal area of Taranaki, but the outlook for many farmers there is far from rosy.
The good news is that the impact of the El Nino on feed levels in most of the North Island has not been as great as anticipated. But it's been hard work to make hay and silage: I'm now well behind with hay making – as are many contractors in the north – meaning the season is all going to be later than normal.
Data from NIWA shows Northland, Waikato, Bay of Plenty and Wairarapa have been flushed with at least 40% more rain than typical in January. And it was good to see much needed rain in the dry parts of the South Island – especially North Canterbury and Otago.
While not a drought-breaker, at least it has shown parched farmers and contractors in these regions that it can rain. The rain will be good for crops and will help lift water levels.
Most stock farmers are well and truly destocked by now, but those who still need to reduce numbers are being hit by low stock prices – making a bad situation worse. Lamb prices are shocking at present and this, on top of the dry season, has made for a pretty tough start to 2016 for most sheep farmers.
All this rain and grass growth has made dairy farmers happy; it's just a shame about the payout. There are now concerns that Fonterra's forecast farmgate payout of $4.60/kg looks increasingly like following the first two Global Dairy Trade auctions of the year. I note that Open Country Dairy recently dropped its forecast and these two GDT results increase the likelihood Fonterra will do the same.
It is still possible that a sudden upswing in prices could happen, but we'd need to see some very large increases in the next couple of months to reach the $4.60 mark. Even that is a fairly poor payout for most farmers, and falling below that will ramp up the pressure on the dairy industry and those who support it – like contractors.
Despite the current lull in commodity prices, the fact remains that farmers and contractors need to keep planning for the year ahead. Hopefully the recent rains will foster extra growth and encourage people to make more supplementary feed and store it away for the next inevitable dry spell.
Meantime, arable harvest has got underway in most parts of the country and early reports suggest crops, especially on irrigated land, are looking pretty good. There is grass seed, rape and barley ready for harvest and all will be in full swing when it dries out.
Like agricultural contractors, rain or shine the work of the RCNZ for our sector continues unabated.
We are currently involved in looking at the review of the Vehicle Dimensions and Mass 2002 (the VDAM Rule). This specifies requirements for dimensions and mass limits for vehicles operating on New Zealand roads. We want to ensure that any changes balance the risks heavy vehicles pose to other road users, plus their impact on the road infrastructure, against the need to allow the heavy vehicle operators to optimise their operations.
For those interested, the discussion documents and submission form are available on line at: www.transport.govt.nz/vdam; submissions close on February 17.
Meanwhile, in early February the RCNZ board will hold its first quarterly meeting of the year in Gore and we will then head to Waimumu for a look around the Southern Field Days. This will allow us a good look at the machinery and demonstrations on display, and to interact with other contractors and farmers, picking up first-hand any issues of concern.
Let's all hope the recent rains, which have revitalised many of us in the agricultural sector, are joined by an upsurge in dairy and meat prices to give the new year the positive boost agriculture so badly needs.
• Wellsford-based agricultural contractor Steve Levet is the president of the Rural Contractors New Zealand (RCNZ).
