Thursday, March 5, 2015
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THE INDEPENDENT VOICE OF MID CANTERBURY
ASHBURTON
Doing the hard yards
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Red sky at morning . . . Farmers are welcoming Niwa’s forecast for autumn.
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Businesses feeling pinch BY DAISY HUDSON
DAISY.H@THEGUARDIAN.CO.NZ
The double whammy of a drought and a lower than forecast dairy payout has left some Mid Canterbury businesses feeling the pinch. Dairy giant Fonterra slashed its forecast payout in December to $4.70 per kilogram of milk solids for this season. Coupled with February’s declaration that Mid Canterbury is officially in a drought, dairy farmers have been conservative
when it comes to opening their wallets. With much of the region’s economy reliant on the agricultural sector, the reduced spending has had a flow-on effect to local businesses. Plucks Engineering Ltd managing director Neil Pluck said business had been quieter in recent times. “We started to see that last year, from December onwards really,” he said. “It’s quieter across the board.” Mr Pluck said the combina-
tion of the dry weather and lower dairy payout was “a bit of a double whammy”. “Even for irrigator farmers the pressure’s on a bit, because they’re running irrigators more than they would.” He said the company had seen a change in how farmers were spending. “Dairy farmers have got a lot more careful with their spending since 2009,” he said. Mr Pluck said the change had had a significant effect on
the business, which then flowed through to suppliers. “We act as quick as they do, we start to tighten things up when we sense a squeeze, and of course that flows all through the network,” he said. “They’re not spending so we’re not spending with our suppliers, so they don’t then have the same income as before either.” Grow Mid Canterbury chief executive Rob Brawley said with 80 to 90 per cent of Mid
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Canterbury’s economy reliant on the agricultural sector, the reduced spending by farmers had impacted on businesses. “If agriculture’s down that has to flow through to the wider economy,” he said. “As soon as farmers heard what the expected payout was, they reduced their expenditure straight away.”
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