Eastern drought comes with $700m price tag
The drought on the North Island east coast will cost the region $700 million and could lead to big changes in land use.
Sheep and beef farmers from East Cape to Wairarapa are taking a direct hit of $300 million, and still waiting for their grass to recover.
The figures come from an Agriculture and Forestry Ministry report that went to Agriculture Minister Jim Anderton yesterday.
MAF Hawke's Bay regional team leader Gillian Mangin said the farmers' income would drop by $160 million over three years. As incomes had been predicted to grow by $140 million, given normal weather, in effect the loss was $300 million.
The multiplier effect, considering such factors as loss of income in the processing industries, would take the total hit for the region to about $700 million.
Mrs Mangin expected most farmers to pull through, however. "They are pretty resilient and most have high levels of equity," she said.
The North Island east coast region holds about a quarter of all of New Zealand's sheep and beef stock.
Federated Farmers Hawke's Bay spokesman Kevin Mitchell said he was not surprised by the figures, but he also expected most to farm their way through their difficulties.
The farmers had enjoyed a good period up till the past couple of years, he said.
But right now farms were short of grass because of a cool, windy spring.
"We're hoping for a wet, warm December," he said.
Stock numbers remained down because farmers had been forced to sell their animals, and it had not been a good breeding season.
Lamb prices were low and it was hard to sell light lambs because no one in the region had enough grass to fatten them properly.
Farmers had used up their stocks of reserve feed and had not been able to make much hay in the spring.
"We're getting grumpy out here in the hills," Mr Mitchell said. Dairy farmers, however, were doing well and some were offering good prices to buy out neighbouring farms.
Mr Mitchell expected some sheep and beef farmers to be tempted by these offers.
Hastings Mayor Lawrence Yule, who is a farmer and chaired the drought relief committee, agreed with Mr Mitchell's comments.
He said apple growers were also finding things hard because of low prices.
"There could be some massive changes in land use," he said, referring to the trend toward increased dairying.
Neither Mr Yule nor Mr Mitchell expected any handouts to farmers from the Government.
The Dominion Post