Higher input prices increase pressure

MEDIA RELEASE

4 July 2008

Higher input prices increase pressure on the sheep and beef sector

New Zealand sheep and beef on-farm costs have increased almost 10 per cent in the year to March 2008.

Meat & Wool New Zealand Economic Service Executive Director, Rob Davison said fertiliser, fuel and grazing had seen the biggest cost increases.

Fertilizer, lime and seeds as a combined category, are up 30 percent on last year, fuel is up 23.5 percent and feed and grazing has risen 13.7 percent.

“However, since March 2008 the price for a tonne of superphosphate has increased significantly from $260 to $480 on 1 June 2008 (+85 per cent) and will impact on fertiliser demand in the 2008-09 farming year.  It is cold comfort to know that farmers around the world are also facing these cost hikes with this international price trend.”

Mr Davison said similarly fuel increases were impacting on farming operations.  The drought conditions throughout large parts of New Zealand over the summer and autumn had contributed to feed and grazing price increases.

Interest rates also showed a significant rise of 9 per cent for the year and electricity was up 7.2 per cent.

“Local government rates and charges increased 6.6 percent and this was the second largest increase in 17 years.  In the past five years rates have risen 33 percent – an average of 6.6 percent a year.”

The full Sheep and Beef Farm Cost Movement Report 2007-2008 is available on the Meat & Wool New Zealand website www.meatandwoolnz.com

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