SOUTH Canterbury farmers are cautiously optimistic about the future on the back of a recovery in red meat prices, according to stock agents who cover a large catchment between Mid and South Canterbury and are in regular contact with their clients.
A good barometer of the rural economy is the strength of prices at the Tinwald Saleyard (Ashburton) and Temuka Saleyards.
Bill Turnham, Elders South Island livestock manager, said general optimism was “pretty good” even among farmers who were going through their books and accounts and finding they were tight for cash.
“They are taking it on the chin,” he said.
The exception was some dairy farmers, particularly those who converted last year. They were reported to be less optimistic because of the lower payout forecasts.
Morale among stock agents was also good, Mr Turnham said.
Recalling 2008’s poor lamb prices, he said: “There was some real hurt out there. All servicing agents felt the pain their clients were going through.”
Peter Walsh, of Peter Walsh and Associates, Timaru, said although lamb was worth a lot more farmers were reluctant to go back into breeding ewes and were instead buying calves and trading stock because they had good feed options.
“I think they’re buying for the immediate rather than the long term.
“Like a lot of things you get out of it what you put into it, but I think we’ll find in time, sheep numbers will sneak up again as part of the supply and demand cycle.”
The current prices for red meat were a complete reversal of last year when confidence was in dairying.
Previously dairy grazing was a cash flow source for farmers. However with dairy owners unwilling or unable to pay the break-even prices required for grazing, sheep farmers were saying no to them.
Noel Hewitson of Rural Livestock Limited, South Canterbury, agreed clients were cautiously optimistic.
“They would like to think the freezing industry is on the right track and the prices will remain sustainable, also they are going into winter with good feed reserves.”
South and Mid Canterbury had a good autumn.
He believed dairy farmers were tracking what influence global events would have on domestic dairying and in the meantime holding back on spending.
Mr Hewitson is also a real estate agent and had noted a surge of interest in rural properties in the last month, which he believed was a reflection of farmer confidence.
First National Real Estate Geraldine had received renewed enquiry for farms in recent weeks, said rural negotiator Noel Walker.
He believed with the latest interest rates sorted, confidence would increase. However, farm sales he’d negotiated had been tough, with hard buyers, and the value of sales was down.
Paul Cunneen, director of Hastings McLeod Real Estate, Ashburton, said there was low to moderate demand and low supply of properties to sell, even though interest was there. In recent months his firm had sold two large dairy grazing beef properties, a large dairy farm and an even larger one on the West Coast.
Mid Canterbury’s mix of arable, horticulture, agriculture, dairying and sheep and beef had buffered Ashburton from the downturn.
“Recession, what recession?” said an upbeat Peter Gluyas, managing director of the Gluyas Motor Group, Ashburton.
“My feeling is things in Mid Canterbury are trundling along as usual.
I expect things to slow down in winter as they usually do, but we are still selling, we have forward orders for combines and harvsters and our car side is strong for new and used.”
The extra 10c a kilogram dairy farmers would receive for their milk had put a platform under dairying that people could plan to, he said. Arable prices were good last year.
Greg Cook, PGG Wrightson livestock manager for Ashburton, said his clients were reasonably optimistic and hoped next year would be as good as this one in terms of red meat prices.
“We need them, it’s more a case of necessity even.”
sandyfinnie@xtra.co.n z
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