Farming margins to take a dive – Nix

By FWi staff

GROSS margins of nearly all farming enterprises will slip this year, according to figures in the latest Nix Farm Management Pocketbook.

Lower prices for farm produce are the main reason. And, while some costs have fallen a little, others have risen sharply, notably fuel and fertiliser.

“Most farmers continue to hang on, after four years of dismal returns, by dint of reduced spending, allowing assets to deteriorate and increasing overdrafts or using savings,” writes author John Nix in the foreword to the thirty-first edition.

“They live in hope of an upturn before long.”

Average milk production costs are put at 17.62ppl. Add on extra quota costs and interest, and the total is well above the expected ex-farm price.

Meanwhile, an average wheat crop yielding 8t/ha (3.2t/acre) is likely to be sold for 65/t. However, the pocketbook suggests it costs about 100/t to grow.

Even with an area payment of 240/ha (97/acre), farmers still face a loss of 5/t for the 2001 harvest crop.