Onwards and upwards
As I read about the latest leaders’ debate and consider the impact of a possible change in government, I can’t help but feel some empathy for our primary producers. There is some sentiment out there that our primary sector are creaming it and a water tax or capital gains tax is something they can just “take on the chin”. If only they realised what our Hawke’s Bay primary sector businesses have had to cope with in the last 18 months.
With more than our average annual rainfall falling in the last 6 months, the orchard, vineyard and cropping businesses have had huge challenges, not just harvesting (or not harvesting in many cases) but doing any sort of work on the land.
It’s heart-breaking and back-breaking preparing the land and tending to it for months on end only to lose an entire crop in the last week or two. The financial risk is huge and if it all goes pear-shaped the flow on effect to our cities can be even bigger. It goes without saying, if these business owners are prepared to take on the huge risk then we should all be very happy that they be rewarded accordingly.
On the agricultural front, I participate in a farm discussion group on a regular basis and it’s a very interesting way of getting a perspective on the variety of farming businesses and the different income streams they pursue to improve their overall profit. You are limited by the land you have and what it is capable of, along with challenges of weather, animal health issues or disease and prices for your product. If we look at the last 18 months, these challenges have all occurred on some farms and the combined effect has resulted in some red ink in the final numbers coming through at the moment. On the other hand, some farms narrowly managed to dodge numerous bullets and will produce a respectable result.
Hawke’s Bay can deliver up vastly different results between the districts which makes it hard to compare yourself in benchmarking.
Beef + Lamb recently released their final 2016 year results (yes, it takes a whole year to gather the data and present it) for the East Coast. The following results are the mean figures and paint a picture of how hard the year has been for some and show very modest returns on capital.
If you would like to see a copy of the entire report, flick me an email at campbell@farminggrowth.co.nz and I’ll send it through.
On a more positive note looking ahead, if the weather stays kind we should see some good results coming out of most rural sectors this summer. Spring has arrived about two weeks early, livestock have come through the winter well, prices are fair to excellent and the water table is well and truly full. Onwards and upwards.
