On Risk and PotentialSunday, Oct 15, 2000
Your intrepid editor has survived the rigors of life on the road through Germany, Poland and Czech Republic.
An area of devastating history, but from a superficial view now very optimistic and full
of determination to improve their lot.
It was a shock to this Kiwi to see the vast areas of land in Poland currently farmed under strip holdings
by part time farming families. If some of the basic knowledge taken for granted by New Zealand
farmers was applied by Polish farmers with satisfactory amalgamation of land ownership into contiguous
farm units the impact of a step up in their cereal and animal production levels would be frightening.
Prior to the twentieth century the Ukraine and Poland were known as the “animal farm of Europe”
it seems that we have the politicians to thank for its decline enabling the Southern Hemisphere
countries to fill some of that production gap. NZ farmers should hope that Poland enters the
EU under favouable conditions that do no disturb the current levels of farm production.
However it is clear that seasonal animal production from pasture managed similarly to that practiced
in NZ we would have very serious competitors in the low cost food production business.
The ending of the last 12 months of“golden weather” has come with a shock at a critical
time in the normal seasonal flow of farm activities. The harsh reminder that farming is a high-risk
business has been driven home with the continuous rain as stock has lost condition and pastures
have turned to soup.
It seems that many dairy farmers are taking progress one day at a time and have to accept that their
peak milk will not be as good as planned. But even more concerning, conception rates are at risk
from cows continuing to milk condition off and this will be adding additional future costs to the
The weather forecast for the next ten days shows little rain but is certainly indicating continuing
bellow average temperatures.
The warning from Westpac Australia’s Chief economist on the likely upward movement of the Aussie
Dollar should serve to warn NZ farmers that there is a potential for price declines in the latter half
of this season’s production. The NZ dollar seems to be maintaining a relative position to
the Aussie dollar that suggests that our movements will follow Australia.
A twenty-cent lift of the Aussie – US exchange rate may equate a fifty five-cent NZ – US
dollar. What effect would that have on bull beef prices or wool prices in February and March?
Once again farmers are left in an uncomfortable position with inadequate or incomplete information on
prices, to balance against the vagaries of the weather. It seems all is normal.