17 Dec 2008

Challenges continue for farmers - MAF report

6:48 am on 17 December 2008

Farmers recovering from this year's drought are being warned there will be more challenges next year, thanks to a combination of rising costs and global economic uncertainty.

The Ministry of Agriculture's latest pastoral monitoring report looks at the production and financial status of dairy, deer, and sheep and beef farmers as well as trends, issues and sector concerns.

Deputy director general of policy Paul Stocks says deer, beef and sheep producers had a very hard time during the 2007/2008 year due to the drought and a high exchange rate.

Deputy director general of policy Paul Stocks says the weather will continue to play a big factor, with soil conditions already drier than usual.

He said sheep and beef farmers will suffer with lower stock numbers on hand and low feed supplies available.

Mr Stocks said an early estimate of the cost of the drought to the dairy industry alone is $1.4 billion.

The dairy sector did slightly better last year because it received a high milk payout which meant farmers were able to lessen the effects of the drought by buying in extra feed. Dairy revenues will fall, but from record highs.

Paul Stocks says the profitability of the agricultural industry will, as always, depend on things that it cannot control, such as the weather, and the global financial situation.