Farmers keeping their wallets closed
A rise in dairy payouts over the past 12 months hasn’t borne much fruit for vendors at the Central District Field Days.
Farmers on day two of the event were asking plenty of questions and showing interest, but were putting off parting with their money until they’re in a better financial position.
ASB senior rural economist Nathan Penny said while more farmers were attending the field days this year, they were unlikely to be throwing themselves at any big ticket items.
‘‘The milk price is better, but farmers are still feeling the hangover from the previous two seasons.’’
Payouts fell to less than $4 per kilogram of milk solids last year. This year, they have risen to about $6.
Penny said the average breakeven point for dairy farmers this season is about $5.05, although it could be more than $6 for farmers carrying large amounts of debt.
‘‘Farmers are happier, but they’re not rushing in to buy tractors.
‘‘I’d imagine they’d be focused more on repaying debt and maintenance.’’
In the sheep industry, lamb prices increased toward the end of summer, something Penny said defied historical trends for the time of the year.
The catalyst was a combination of more rain and grass, and a lower slaughter rate.
Wool prices, however, had taken a nosedive of nearly 40 per cent on last year.
‘‘Farmers are having to find some cost savings and while they’ll be tempted this year, it’s unlikely they’ll spend too much.
‘‘This time next year, if things stay the same, then we could see spending pick up again.
‘‘It’s more than we can say for last year - most farmers didn’t even come last year to allow themselves to be tempted.’’
But the tentative approach had not affected everyone as Electrodip sales manager Barry May said farmers had shown more interest in his electronic spray races.
‘‘[Farmers] are in a more stable position to spend the money this year. Last year there were a few farmers, but they didn’t spend a lot of money.
‘‘Even though the price of wool has dropped a bit, they are willing to spend a little bit more this year.’’
FencePro owner Grant Barnes said sales were slow, but not reflective of the industry.