Dry Land dairy farmers are set to be hit in the pocket again.
Following the low payout forecast at $4.70 for milk, they look set to be hit financially again – this time by the dry conditions.
With very little rain in the area having fallen in North Otago since July, fields have become dry and it is having a big effect on dairy farmers.
Westpac’s Head of Agri Business Mark Steed said the dry weather will hurt farmers.
“Yes it’s going to hurt them and unfortunately some of them will see a financial loss at the bottom of their balance sheet at the season’s end,” he said.
“We are trying to help as much as we can and offer them assistance, but for some farmers it could be too late and they could suffer a big hit to their income.”
With stock conditions potentially taking a it Mr Steed said this could have an impact on winter.
“If significant rains don’t come there will be a potential shortage of winter feed with majority of dry-land crop yields around South Canterbury significantly back. In fact, in many cases winter feed crops that were sown late haven’t struck, a feed shortage will potentially push price of feed up, which under current circumstances is a concern for many farmers.”
However while it’s expected to hit farmers in the pockets at winter time, Mr Steed said the full effects of the financial strain might not kick in until later.
“It will hit them hard but it may not be until next season when they feel it most.”
North Otago Federated Farmers dairy chairman Lyndon Strang said yes farmers would take a hit but many of them should be prepared.
“It will hit some of them financially, and I’m not sure how badly, but most farmers should be prepared for this because of how average the last two summers were but plenty of stock feed should’ve been made.”
While farmers were expecting to be hit in the pocket, Mr Strang said some of this was due to the low milk payout which is forecast as well.
“It’s just been one of those seasons really, where the milk pay out is lower and we’re having and outstanding summer, where in previous if ones happened the other has been good. It’s just this year both have come at once.”
Mr Strand said it’s great that banks are offering support for farmers.
“It’s pleasing to see the support there and everything, but if we continue to get the 10-20mm of rain like we have had over the last couple of days every two-three weeks then I think we should be able to get through.”
While stock is low Mr Strang said most farmers have prepared.
“Many of the farmers in this area will have been made aware about the possibilities of this happening and will have something in place.”
Meanwhile Primary Industries spokesperson Richard Prosser said it’s time to declare a drought.
As dry conditions are taking grip on many farms the Minister for Primary Industries Nathan Guy needs to take the bull by the horns and declare regional and local adverse events, says New Zealand First.
“In other words, it is time to say officially there is a drought.
“By doing this they can get some financial support through the Rural Support Trusts.
“The financial burden caused by events such as droughts and floods is high for farmers and this affects the farm service businesses, their communities as a whole and the national economy.”
By Brayden Lindsay