“At the mid-point in what is a tough 2012-13 season, we are seeing some improvement in confidence since the start of this season. That masks a real split between dairy and the rest of pastoral agriculture,” Federated Farmers president Bruce Wills said.
“Undoubtedly rising global dairy prices and upward revisions in payout forecasts have helped the dairy sector regain some confidence. Then again, this comes off deep pessimism recorded at the start of the season and things are hardly buoyant now.”
He said the hurdle that many farmers were facing was the high dollar, which was acting like a sea anchor on all export returns.
“Tackling the high dollar starts not with a printing press but by central and local government cutting back on borrowing. While some agriculture debt is about survival, government still has an entrenched ‘borrow and spend’ culture that needs to change.”
Of particular concern was the heat sheep farmers were feeling, with lamb prices down 35% on the same time last year, Wills said.
The current dry conditions are also doing nothing to increase confidence.
“As the survey was in the field in the first half of January, the current dry spell will be of mounting concern. We are also aware the ‘dry’ is now biting into dairy production, in the North Island especially.”
