Fears drought's impact will linger on the Coast

02:49, Apr 14 2013

Hard-hit West Coast farmers are still spending about $1000 a day on outside feed for cows to cope with the drought.

Rain falling in the last two weeks has helped farmers, but peak grass growing is well past and their losses are mounting in the drought-designated zone.

The best estimate is that West Coast farmers are down an average of $100,000 from extra feed costs and lost milk payments. Average farmer losses are the same, if not more, in the North Island, with larger operations feeling it worst.

More losses may continue, depending on pasture and winter crop growth.

Federated Farmers adverse events spokeswoman Katie Milne said some drought regions had received little rain, but farmers receiving reasonable rain in other drought-declared areas would still take a long time to recover.

"It can take all the way through to Christmas before grass recovers fully and reaches its maximum potential.

"It depends on the farm. They have to recover from the financial hit of buying extra feed and grazing off animals they didn't expect to, and replace milking cows they didn't expect to get rid of."

Sheep and beef farmers could be in a worse recovery position, Milne said.

"For sheep and beef, the ramifications could last longer because their ewes are only going to the ram now in the height of the drought, so their lamb crop could be severely reduced. That remains to be seen, but their income could be down for [another] year on top of extra feed having to be brought in."

Sheep and beef farmers will also have to replace breeding ewes and cattle sold to get through the drought. Stock prices will likely be more expensive because of tighter supplies from more animals going to the works.

"At least for dairy farmers, the cows were already in calf before the drought.

"In some cases for sheep and beef farmers, it could carry over for a couple of seasons, unfortunately.

"Dairy farmers will hopefully pull out of their hole in the early part of next season, weather permitting," she said.

Some West Coast dairy farmers were still spending about $1000 a day on feed.

Harder-hit farmers would take a season or two to recoup the large losses, regardless of how well they did next season, she said.

Federated Farmers president Bruce Wills said some sheep and beef farmers could take two to three years to get through the drought, which had been a one-in-70-year event in some areas.

The drought, low prices and high dollar, were joining forces to knock the "poor, old sheep farmer", Wills said.

Sheep and beef farmers were forced to sell stock when lamb prices were down by one-third from a year ago for lamb, while wool returns were back and beef had come off the boil because of the record cull cow kill.

Dairy framers were in a better position, with commodity dairy prices rising at Fonterra's auction by 40 per cent in the last six weeks.

In a drought, milk prices rise because of limited supplies, whereas with sheepmeat and beef, animals flood the market, causing prices to fall.


The Press