19 Winter milk: Is it worth it? Vol 16 No 5, February 6, 2017
farmersweekly.co.nz
Food is too cheap Annette Scott annette.scott@nzx.com
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HEEP farmers are struggling in the climate of cheap food versus sustainable production, industry leader Mark Adams says. Supermarkets were fighting for market share in a very competitive environment and that was driving the price they paid the producer. “And we have arrived at a situation where the cost of production is no longer sustainable around the price of the food we are producing,” the Fairlie farmer and South Canterbury Federated Farmers provincial president said. And there were ramifications around that now as farmers engaged with environmental issues and sustainable food production. “It’s a case of we are running down our natural capital that is really stressed and bursting at the seams. “The temptation is to cut corners but that is not socially acceptable,” Adams said. “But the reality is we can’t achieve all we want to achieve on the prices we are getting in this climate of cheap food. “Farmers are engaged in the environmental space and trying to fund it with the current prices – it’s extremely difficult and we run the risk of being both socially and environmentally not sustainable.” Adams said the core of the matter was the complexity in pricing in a depressed global meat market. “The meat companies are desperate to get prices up and money back to their farmers but huge global uncertainty of which we have no control is underpinning confidence. “We have a legacy of the way we do business. We are transitioning but we have
yet to bear fruit,” Adams said. Wool was the biggest disappointment, he said. “The $3.40 a kilogram for hogget wool is shameful. “Whether it’s the Chinese New Year or the European ski holidays, the market has gone horribly flat or wool is very sick but somewhere those buyers have invested a lot of money in machinery so that gives some hope they might be coming back into the market sometime soon. “But the clock is still ticking and still we wait for a turn in the tide.”
The reality is we can’t achieve all we want to achieve on the prices we are getting in this climate of cheap food. Mark Adams Farmer Adams said the annual round of ewe fairs and onfarm store lamb sales, while giving a keen sense of where the market was at, had depicted a false sense of optimism. “The Temuka two-tooth and ewe lamb fair in particular was disappointing in that it started with a hiss and a roar and wound down to a whimper. “Either the market couldn’t cope with the number of stock on offer or people had not done their homework.” While there was a degree of re-stocking, it was not driven by optimism. “It’s more the fact sheep farming is what we do and we have to keep being good at what we do even if we are not being rewarded,” Adams said.
IN THE DARK: Sheep farmers don’t know what they will be earning next week, Cave farmer Chris Hampton says.
Uncertainty a challenge THE biggest challenge for sheep farmers was the uncertainty, Cave sheep farmer Chris Hampton said. “If you are a dairy farmer you know in advance what you will get and can set a budget to that. “For us sheep farmers we don’t know what we will get next week. The only certainty is the future can only improve.” Hampton sells Suffolk, South Suffolk and Charollais stud rams
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and in a leap of faith this season put 150 rams on the market. “There was indication given the feed situation and the falling margin in beef that sheep could be a reasonable option this year and we have sold 120 of those rams already, up on the average 100 of recent years.” There were signs of confidence, he said, with his third annual ram sale realising an average price of $100 a head better than last year with increased
demand also bringing in 15 new buyers. He was hopeful of some improvement in sheep. “If the meat companies don’t get enough lambs to fill their markets the buyers will go somewhere else so really it’s at tipping point for the companies to get the marketing sorted. “I am hoping that time has come, if not this season then next.”
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