14 minute read
Opinion
Utes vital to sector
Alternative View
Alan Emerson
LAST weekend saw Old Timers Day at Wairarapa’s mighty East Coast rugby club. The club is based at Whareama, 30 minutes east of Masterton. There’s a church, school, hall and playing fields. That’s it.
Old Timers Day was a superb rural sporting event, and a great catch-up for the local community. The rugby was state-of-the-art, as was the crayfish, ham and the cups of brown tea.
The utes were three deep on one side of the paddock and two on the other. I’ve seen less spectators at NPC games.
Mind you, I’d seen worse rugby as well.
The utes were young and old, predominantly diesel and without exception they were covered in dust and mud. I didn’t see a clean vehicle.
That’s par for the course in the rural hinterland. A ute is a tool and a valuable one. It is there to do a job. It is not there to look pretty.
Someone should tell the clowns in Wellington.
Before I go there, I must mention the country club; East Coast did lose by the slimmest of margins (13-10) to the team from the rustic rural hamlet of Carterton. More importantly, it was a game of two halves and rugby was the winner. The match moved at a fast pace, with the referee not consulting the video ref once.
It’s as it should be.
Getting back to utes. There has got to be something in the water in Wellington that eliminates any vestige of practicality and common sense when people get there.
The latest stupidity is to tax utes and subsidise electric vehicles (EVs).
EVs, even with the subsidy, are incredibly expensive and their range is limited. The Government’s website proudly tells us that’s not a problem because the “average” round trip in NZ is only 90km. From the farm to Masterton, the return is somewhat longer than that.
There are six reasons to buy an EV, they tell us. The first is to slash emissions. That’s true, but an EV has a higher carbon footprint to construct.
The second point is that EVs have lower lifestyle emissions which is true, but you then must dispose of the toxic batteries.
There is no queueing at petrol stations which is correct, but you can take two hours to charge an EV.
We are also told that EVs are “cheap to run” – if you can afford the purchase price. They’re a “quiet, zippy ride” if that’s what you want. Having a ‘zippy’ ride in the roads round here would probably promote a crash, but an accident can’t affect our GHG emissions.
Transport Minister Michael Wood tells us that the Government initiatives, all $302 million of them, should promote 190,000 extra EVs. Considering the NZ fleet has 4.1 million vehicles, that’s not a lot.
My point is that if Wood wants to promote EVs that’s fine, but don’t do it at the expense of the productive sector.
For a start, no one is currently manufacturing electric utes. If it happens, it won’t be for years.
And while I’ve an open mind, I cannot imagine hauling the trailer, complete with a load of fence posts out from Masterton, by driving a Prius, a Suzuki Swift or a Nissan Leaf.
I can’t imagine putting half a dozen rams in the back of one either.
So why are we doing this?
Subsidising EVs is a sop to the wealthy as even with the subsidy, the average person can’t afford one.
I’d also like to see an independent analysis of the claim that the increase in electric vehicles will result in a reduction in our CO2 emissions of 9.2 million tonnes. The average car produces 4.6t of CO2 a year. If you multiply that figure by the 190,000 new EVs the Government is hoping for, the figure is 879,000t.
Conversely, increasing the tax on a workhorse in the form of a ute is little more than a bloody-minded impost on the productive sector be they farmers or trades people.
It’s important to remember that EVs for the wealthy are already being subsidised. They don’t pay a cent in Road User Charges or petrol tax.
Those driving petrol and diesel vehicles pay for all the road construction and maintenance. EVs get a free ride.
What irritates me is that farmers have little choice over the vehicle that they drive. In most cases it needs to be four-wheel drive. Farms in this part of the country aren’t flat.
In addition, the vehicles need to be diesel. I did have a petrol ute, which didn’t cut it.
From a safety perspective a fourwheel drive diesel ute is the best vehicle for the farm.
So why tax a ute, especially when a Remuera family, with their two tractors, can look forward to a government subsidy to change to EVs?
It is all a complete shower.
WRONG APPROACH: Alan Emerson says there’s nothing wrong with the Government promoting electric vehicles, but it shouldn’t be at the expense of a productive sector.
Your View
Alan Emerson is a semi-retired Wairarapa farmer and businessman: dath.emerson@gmail.com
Nurturing NZ’s future farmers
From the Ridge
Steve Wyn-Harris
I WANT to tell you about a great initiative out there because it’s a good idea and it’s an uplifting story.
Like many industries, the sheep and beef sector has struggled to get enough quality young folk to enter the industry as a career choice.
Near here we have Smedley Station, which has a two-year cadet training programme and has 13 cadets graduate from the course each year.
Up in Gisborne is the Waipaoa Station Farm Cadet Training Trust, which sees five young people graduate from their course annually. And there are other worthy cadet courses scattered around the country too.
They offer high-quality accredited farming courses and provide hands-on agricultural skills training for these young farmers.
The demand to get into these well-regarded institutions far exceeds the number of places available.
But combined, they are not able to train enough young sheep and beef shepherds to meet the need that is out there.
Tam and Dan Jex-Blake in Gisborne have been training young folk for many years and developed a model based on the training institutions mentioned above, but where the students live out on-farm.
This model has grown into what is now called Growing Future Farmers (GFF).
Last year, GFF ran a pilot programme with a small number of students and then later in the year went live, looking to build a good intake for the year we are in. There are now 60 farming students out there on farms around the country.
Stuart Ellingham, who is managing director of Horizon Farming and a board member of GFF, got in touch with me and asked if we could do an interview on my rural radio show The Cockies Hour. I of course said no problem, as championing our sector is a primary driver of the show.
We had a good chat about GFF, its goals and that to be successful it needed a good complement of young school-leavers to apply and equally critical, enough farmers prepared to be farm trainers to provide a farm and to nurture these young people.
He told me they were looking for trainers who would be good, patient listeners, encourage engagement, know the subject matter, be organised, be able to communicate well and value lifelong learning.
The students would end up with top skillsets and qualifications, two trained dogs and assistance moving on into good shepherding jobs.
We gave out the details of the open days and I moved onto other interviews.
Later in the day, I chanced into Nick who works across the road on the neighbouring farm and asked him how Lochy his son was getting on. Lochy had been particularly useful for my docking in the past few years.
Nick told me he was good but determined to leave school, which they would allow as long as he had a job and his driver’s licence, which is pretty much the advice most parents hand out to their school-leaving children.
Later that evening I had a chat with Jane and the next day went over to see Lochy and his parents. I told them about GFF, suggested they have a look at the website and if interested I reckoned, we might be able to do something together that would be in everyone’s interests.
Lochy would have a purposeful two-year structured training course, Nick and Amy would have young Lochy under their roof for two more formative years and I’d have a great young fellow helping me run 3500 stock units, which I’ve found more taxing in my sixties than in the carefree days of past years.
Lochy and his mum Amy went along to an open day and the decision was made for us to apply.
Our joint application was successful and for the past five months Lochy and I have worked together. It has been a genuine win-win relationship and he has performed and grown admirably. I’ve been able to download much of the learnings from a 40-year farming career. And I’ve really appreciated the reduction of the physical load that farming requires.
Coming up are the farm trainer and student open days over the next six weeks, designed to show another potential intake of what GFF has to offer.
Regions such as Gisborne, Hawke’s Bay, Wairarapa, King Country, Taihape, Winton and Kurow are hosting these days.
This is your chance to encourage young people into a wellconstructed training programme and to become a farm trainer yourself, and perhaps have a profound positive influence on a young person’s life.
Go to the Growing Future Farmers website to get the details and dates.
Wealth depends on capital gain
The Braided Trail
Keith Woodford
THIS is the third article in a series investigating New Zealand’s pastoral sheep and beef farms. The first one was an overview of NZ’s 9200 commercial sheep and beef farms, and how the pastoral farming area has declined over the past 30 years. The second focused on the North Island hill and hard hill country, now comprising approximately 4000 of these 9200 commercial farms. On those hill farms, key issues are land-use competition between pastoralism and production forestry, combined with retirement of the tougher country for carbon farming.
This time my focus is on the 4400 intensive farms spanning both North and South Islands. They are classified by Beef + Lamb NZ (B+LNZ) as classes 5-8, with class 5 being in the North Island and classes 6-8 being in the South Island. That leaves 200 high country and 600 South Island hill country farms that need their own analysis, but that will have to wait.
These B+LNZ categories should not be confused with the NZ land inventory classifications, which also run from 1-8, but with class 1 being the best and class 8 suitable only for conservation.
Class 5 North Island finishing farms
These farms are typically small family farms, averaging around 290ha, carrying 2700 stock units and employing about half a labour unit additional to the farmer. In the past 30 years, the number of these farms has decreased from 3350 to 1045. Where have these farms gone?
The remaining farms have increased in size by about one-third, but that still leaves about 400,000ha that has moved to other land-uses. Urban development, lifestyle blocks and some horticulture, including market intensive vegetable production, will all have contributed. Dairy conversions and dairy support blocks will also have contributed, particularly in Hawke’s Bay and Wairarapa. But the overall North Island dairy area has not increased greatly in more than 20 years, so dairy cannot be the main reason. Sorting out the details of land-use change on this class of land would require more research.
On the class 5 sheep and beef farms that remain, there has been a drift towards beef over the past 10 years. Sheep stock units are down from 50% of total livestock units 10 years ago to around 40% currently. Cattle stock units have increased over this period from 50-60% of total livestock units. For clarification, a livestock unit is based on the feed required by a typical ewe.
Wool income has been less than the cost of shearing for the past three years. With beef income now easily exceeding sheep income on these so-called sheep and beef farms, they are now better described as ‘beef plus sheepmeat’ farms.
Over the past 10 years, there have been fluctuations in net income but no clear trend. However, this is on a nominal basis before adjustment for inflation. Accordingly, an alternative perspective is that these farms have been drifting backwards. The estimated profit by B+LNZ for 2020-21, from which farmers have to deduct their drawings, is $111,000.
Over the past 10 years, average debt has increased from $450,000$700,000, but net worth has increased from $3.7 million to $5.7m. Most of the increased net worth has come from increasing land values, with nearly all of this occurring in the first half of the decade. Low interest rates have been a factor in allowing these farmers to keep their head above water on a cashflow basis.
Class 6 breeding and finishing farms
Class 6 farms are spread across the South Island. They have breeding stock and they also finish lambs and cattle. The farms average close to 500ha, they employ on average about 0.7 labour units, and they carry about 4300 livestock units. Lambing percentage is typically 135-140% and calving around 85%. Approximately 60% of the livestock units are sheep, with cattle a little under 40% and deer about 2%. Sheep numbers have stayed relatively constant over the 10-year period, but cattle numbers have increased by around 40%, leading to an overall increase in stocking rate of about 15%. Wool income has declined 70% over the past 10 years and has been less than shearing expenses in the last two years. These farms have tended to be more profitable than most other types of sheep and beef farms. They have been averaging about $145,000 net income in recent years. Debt averages around $1.3m, up from 560,000 10 years ago. Net worth is about $6.1m, up from $4.9m 10 years ago.
Class 7 intensive sheep sarms
Class 7 farms are mainly in Southland, South Otago and West Otago. The decline in farm numbers over the past 30 years has been massive, dropping from about 3300 farms down to 1040. The remaining farms have increased in area over this time by about 30%, and now average about 250ha effective area. About 350,000ha of this land class has shifted to other land-uses over the last 30 years, with dairy conversions being the biggest contributor.
The remaining farms employ on average 0.3 labour units, and on average they run 2500 sheep plus 100 cattle. More than 75% of income comes from sheep, but wool income has been less than shearing expenses for the past two years. Net worth has remained almost static over the past 10 years, increasing from $4.6m-$4.7m. Debt is up from $600,000-$750,000. Net income has averaged about $100,000 over the past 10 years with no clear trend but tends to be volatile, in part because of a lack of diversification options.
Class 8 mixed cropping
Class 8 farms are mainly in Canterbury. Since 1990, the area has declined from 251,0000ha down to 184,000ha, with dairying being the biggest cause of landuse change.
Individual remaining farms have increased from about 250ha in 1990 to 400ha currently. About 65% of income comes from crops, but animals are still of fundamental importance in maintaining soil fertility.
In the past 10 years, there has been a continuing shift from sheep to cattle, with cattle increasing from one-third of the livestock units 10 years ago to two-thirds now. Most of these cattle are dairy young-stocks held throughout the year, plus nonlactating dairy cows in winter.
Debt on these class 8 farms is unchanged over the past 10 years at $2.85m and net worth has increased from $7m-$9.9m. Early in the decade, net income was averaging around $200,000, but in the past three years has averaged $110,000.
The big picture on intensive sheep and beef farming
Across NZ, the total land area used for intensive sheep and beef farms has declined from 2.5 million ha in 1990 down to about 1.3m ha currently. The remaining farms have got bigger. On these 4400 intensive commercial farms, there has been an ongoing drift towards cattle, particularly in the North Island. This drift is closely linked to the dairy industry. It includes dairy heifers, nonlactating cows and male dairy progeny that are raised for beef. On all of these farms, it currently costs more to shear the sheep than what the wool is worth. The old maxim that survival is about cash, but wealth comes from capital gain, is still true.
Early in this article, I mentioned that I have yet to consider the changes that have been occurring on South Island hill and high country. That will be a markedly contrasting story.
FOCUS: Keith Woodford continues his pastoral sheep and beef farm series, this time focusing on the 4400 intensive farms spanning both North and South Islands.
Your View
Keith Woodford was Professor of Farm Management and Agribusiness at Lincoln University for 15 years through to 2015. He is now Principal Consultant at AgriFood Systems Ltd. He can be contacted at kbwoodford@ gmail.com Previous articles can be found at https://keithwoodford. wordpress.com
