Agsafe Weekly Rural Report
Finance:. NZ dollar eased again over the week & remains a very weak currency. Brent Crude are falling as the oil tankers leave the gulf. The current price is $72.49/barrel & we should see some further drops in fuel prices at the pumps.
Wool: The wool prices continue to firm with optimism in the coarse wools.
Beef, Sheep & Venison schedules: The meat schedules remain strong. All meat schedules remain firm as demand continues to grow for red meats internationally.
Dairy Prices. The Pulse Auction is indicating a further easing in prices for the upcoming g/DT auction. The weakening dollar will continue to underpin the current dairy prices as the dairy prices ease.
I have seen a lot of thin cows as I have driven around the countryside over the last 2-weeks. It is difficult to put the condition on in the short time before spring calving starts. Maize silage and other high carbohydrate feeds will help and a multi-mineral injection can assist. The cow condition at calving will affect the cows ability to produce through the season.
Quote: “There is nothing in the world so irresistibly contagious as laughter and good humor.”
Need Help. If at any time you just want to talk & need someone to talk to, just call - Male Support Services (Waikato) 0800-677-289, or Rural Support Trust 0800-787-245. Crisis TXT – HELP (4357). A shared problem can be a problem solved!!
Jim’s Weekly Rant:
This is the first time in many years that the “farming gods” have all been smiling at the same time and remember it is partly due to our very weak dollar!!. Wool is at sustainable levels, beef prices are continuing to rise and sheep meat demand is increasing while dairy prices remain firm. All farming activities are considered to be profitable, which is great news for the farmers and the rural economy. Around 85% of all of New Zealand’s export wealth is generated by the rural sector so the profits from agriculture become important for everyone, especially for the government heading into the general election. With good returns there becomes an obligation on the farmer to act carefully and with caution. The next month or two is a time to do some real planning and reset your wants, needs and objectives so you don’t get to the end of the few golden years and wonder what happened to the profits. Some of the major considerations must include debt reduction, updating old or obsolete plant and equipment, off farm investments, and internal restructuring to facilitate succession planning. The creation of some new property titles might be a prudent investment to help future proof the capital. There are temptations to buy the better beach-house or new motor vehicles, or even build that dream home on the farm that might overcapitalize the farm and make a sale or transfer to a family member impossible or even invest in some of the “wearables” that are fashionable. It is important to have a formal business meeting to discuss the plan and ensure everyone is on board. If it involves the family, have them attend the meeting. Keep some minutes and write down the plans and proposals so they become understood and embedded in the minds of all involved in the business. It might be prudent to have an independent person chair the meeting to ensure all involved in the business have an equal opportunity to input ideas and enter into the discussion. With the average age of farmers increasing, I am of the opinion that reviewing the succession plan should also be a priority at this time and that might involve the whole family with equity and fairness being paramount. Wills should also be reviewed and if there are to be disproportionate distributions, a document with a list of wishes should be discussed and attached to the will. The changes that might occur in the business over the “golden” period will impact on many parts of the business and if the planning is done well the whole family can benefit. The transferring of property into new entities or titles must comply with the law and if the property is sold within the “Bight-line” period there will be tax to pay. If there is no planning, the profits will soon be squandered and everyone left wondering when times get tough again, because they will!!! Please don’t ask Chloe Swarbrick to do your budgets as her attempt at budgeting has been woeful. And just remember that money and its distribution is the cause of many family and business bust-ups, but communication discussion and involvement can keep assets intact and families together.