Ag 04 june, 2015

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Thursday, June 4, 2015

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Downturn hurting BY SUE NEWMAN

SUE.N@THEGUARDIAN.CO.NZ

As Mid Canterbury dairy farmers close their wallets on the back of tumbling milk prices, Ashburton retailers say they’re feeling the impact of that spending shutdown. International dairy prices dropped for the sixth successive time on Monday and that continuing fall combined with Fonterra’s low forecast for next season of $4.40 per kg of milk-

solids is now being felt across the Ashburton District’s retail and service sectors. People were being naïve if they thought less money in dairy farmers’ pockets wouldn’t be felt in town, said retailer Alister Lilley. “We live or die on the rural sector and we have to be conscious of that and respectful of that, it’s pretty tough out there,” he said. The rural spend had already

contracted and it would continue to contract, Mr Lilley said. “When the dollars are not there people watch their discretionary spending and we have to watch our spend accordingly. “The customers are not around like they were 12 months ago.” People were still replacing household items that needed replacing but holding off on anything that wasn’t a priority, he said.

“It’s not as bad as it was in the late ’80s but it is having an impact on town, that’s for real and as the year goes on it will tighten further.” Motorbike retailer Bryan Donaldson has already taken steps to tailor his business to meet the changed rural environment, offering tailored service packages at pre-set prices for farmers. “We’ve tightened our belts a bit, we don’t count on anything

and we have to make sure the services we’re offering are services farmers can afford,” he said. Winter was traditionally peak sales time for farm bikes, but this year sales were slower than in the past; he’s hopefully the slow start will be made up later in the season.

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