Hardest climate in 70 years: B+LNZ

Southern sheep and beef farmers (from left) Matt McRae, Hannah Blakely and Nigel Woodhead shared...
Southern sheep and beef farmers (from left) Matt McRae, Hannah Blakely and Nigel Woodhead shared their misery index results at a field day on Barr Falls Farm in Owaka last week. PHOTO: SHAWN MCAVINUE
Making a living from sheep and beef farming has never been harder and many farmers are in a "misery locker", Beef + Lamb New Zealand South Island lead extension manager Hannah Blakely says.

Mrs Blakely led a field day titled "farming to stay in the game" on Barr Falls Farm in the Catlins last week.

A B+LNZ survey showed the economic climate for sheep and beef farmers had never been tougher in the 70 years since data had been collected.

"It is worse than the 1980s, that’s why people are feeling it, it is hard."

Agribusiness accountant Pita Alexander created the "misery index".

Farmers calculate their percentage by adding their business working expenses and interest and then dividing that figure by their gross farm income.

Ideally, farmers should be consistently farming lower than 78%.

If farmers had results of more than 80% long term then they were in the "misery locker" and that was "not a very good place to be".

Mrs Blakely and fellow southern sheep and beef farmers Matt McRae and Nigel Woodhead shared their results for the past five years.

They asked for their percentages to be excluded from media reports.

Mrs Blakely, of Cattle Flat, said the index percentage of their sheep and beef farm increased when a bank loan moved from a fixed rate to a 5% higher floating rate.

"That really hurt us."

To improve their farm’s financial results, they were working towards a New Zealand Farm Assurance Programme Plus certification for a higher-level sustainability standard resulting in a premium of 10c a kg of lamb from their meat company.

Other meat companies offered similar premiums.

"It is going to be worth putting in the hard yards and get it done."

They might also be eligible for an environment discount on a loan with Westpac.

Both benefits could provide a potential saving up to $60,000 for the farm business which was "massive".

Mr Woodhead had planted trees on his farm near Milton to reduce the risk exposure to farming sheep and beef.

"We are trying to spread our eggs and not be so reliant on producing lambs in the spring and killing them in February and March and getting screwed."

The farm had been hit by four consecutive dry years which had been impacting lambing percentages.

He had removed a type of pasture which had been performing poorly in the dry.

"I’m sick of getting screwed by grass grub and clover doesn’t grow in the dry so this year I’ve said ‘bugger it’ and we are getting out of clover completely."

Rearing Friesian bulls to 18 months old and selling them as store had kept the farm business alive the past two years, he said.

He recommended farmers review the value gained from services their business was paying for, such as accountants and lawyers.

"If someone ain’t pulling their weight, cut them and get someone else."

Mr McRae, of Mokoreta, near Wyndham, recommended farmers join discussion groups to share knowledge and "throw ideas around".

"Other farmers can sometimes be your best critics."

He also advocated for farmers spending time off farm to do something they enjoyed.

"You work hard during the day and if you don’t have something else to go to, you’ll do something extra, rather than investing in yourself."