Fertiliser Cooperative results show where farmers are investing
Released 02 Aug 2010
Federated Farmers believes last week's results from Ravensdown and Ballance shows that farmers are focused on productive investment.
"I'm pleased to see Ravensdown's sales are up 218,000 tonnes from last season and that follows on from the five percent uplift Balance has announced. It tells me farmers are investing into farm productivity," says Philip York, Federated Farmers economics and commerce spokesperson.
"It's great to see both cooperatives back in the black, given the last season was tough for New Zealand agriculture. The fertiliser cooperatives are under-recognised for the contribution they make to the economy. In fact their combined revenues easily outstrip the wine industry.
"I'm particularly impressed with Ravendown's growth out of Australia. The Aussies have really taken to the New Zealand cooperative model, especially in Queensland.
"Fertiliser is important to boost spring production especially given the widespread drought we experienced over the last autumn.
"Yet we see from both results that farmers are not applying the same volume as they were a few years ago. It underscores why Thursday's decision to lift the Official Cash Rate (OCR) was in Federated Farmers view, the wrong one.
"Farmers are trying hard to balance debt retirement while lifting productivity. We know from the latest Federated Farmers Farm Confidence survey that farmers across all sectors expect to increase production.
"This is a necessity given Government imposed costs, like ACC levies, GST and the Emissions Trading Scheme. Most cost pressures are coming from the non-tradable sector yet the tradable sector is most vulnerable to increases in the OCR.
"Farmers are increasing investment but that's in productive inputs like fertiliser. Fertiliser is all about increasing the production of dry matter - ultimately increasing export protein and fibre.
"Surely this is something that needs to be encouraged as agriculture was central to New Zealand recording its first June trade surplus since 2002," Mr York concluded.
For further comment:
Phil York, Federated Farmers economics and commerce spokesperson, 09 292 8843, 027 290 5418
