A STRESSED ENVIRONMENT AND THE WAVERING NZ DOLLAR
August 23, 2010
Will This Raise Any Eybrows?
From an environmental point of view profit margins on the average sheep and beef farm should be raising an eyebrow or two in government.
The messengers relate and extol the quantum of food exported and hail this statistic for all to see as a sign that all is well.
All is not well! EW councillors have been shown the increasing intensification with heavier stock, which is being grazed on class 6, 7 & 8 land west of the Waipa River. This steeper land was once the domain of sheep, a somewhat lighter animal.
I’m going to sheet this land use change back to one continuing uncontrollable event, our wildly fluctuating dollar. Our profit margins are deplorable, so what is the farmer expected to do but increase their risk by taking on animals that will give them a greater return. MAF figures show an average meat & Wool farmer’s cash surplus is a miserly $6900, not quite the return anyone should expect on a $2m property.
Once this farmer has had his day, which is nigh, I doubt that too many folk will be willing to take on the mantle of a mortgage and the risk of carrying stock through one rotation and end up with less equity than you started with.
Don’t just look at the big picture, the profit margins from any ones point of view is unsustainable and is putting the many links in our economy at risk, not to mention putting our environment under increasing stress.
Our anchor, the producer, finds his whole environment is under stress and, unless this is addressed, then our dreams of living in a first world economy will just float away.
Anthony Armstrong
18/8/10
