David Handley, GM Agribusiness & Corporate Banking, BNZ.
THREE KEY FACTS
Dave Handley is GM of Agribusiness & Corporate Banking, BNZ
OPINION
In the past few months, I’ve spent time talking with farmers and growers across the country, from the Mystery Creek Fieldays in the Waikato to Manawatū and the Wairarapa.
The sentiment from most of these conversations has been fairly consistent – times are tough right now, particularly in the sheep and beef industries. The main causes of this financial strain are restricted cash flow due to low commodity prices, stubbornly high on-farm costs and elevated interest rates as the Reserve Bank maintains its tight monetary stance to combat inflation.
But despite this, there are industries with a more upbeat outlook – dairy is fairly stable, and the kiwifruit industry is performing well.
There is also potentially interest rate relief around the corner.
We’ve seen a solid recovery in global markets, and it’s likely this trend will continue. This should hopefully lead to stronger commodity prices across the board.
We are seeing signs the Reserve Bank may cut the Official Cash Rate (OCR) sooner than previously forecast, with our economists forecasting this easing to start in November, if not sooner. Stronger cashflow would enable farmers to catch up on any repairs, maintenance, fertiliser or capital expenditure they have deferred while the budget was tight.
Lower interest rates could also see liquidity and confidence rise in the property market, providing more opportunities to sell or buy land with confidence. And any increases or improvements that benefit farmers and agribusinesses will have a positive flow-on impact for the entire rural economy.
The primary industries are a significant contributor to New Zealand’s economy, with the Ministry for Primary Industries forecasting export revenue of $58.1 billion.
For more than 50 years, famers and growers have put their faith in BNZ, making us the second largest rural lender in New Zealand. We’re proud of this heritage and the role we play to support the agricultural sector.
This scale has given our bankers a breadth of experience, enabling us to provide excellent support to farmers in a wide variety of situations.
We know that potential relief in the next few years doesn’t help farmers and agribusiness owners now.
What they need is help and support which addresses the concerns they’re facing now.
Given it is a tough time, our Agribusiness Partners have been proactively meeting and working with farmers to support them through.
Where appropriate, this has included moving customers to interest-only repayments, restructuring loans or providing additional working capital funding. Our Customised Average Rate Loan product is useful in times like these. It is designed to provide repayment flexibility, with principal repayments able to be scheduled during strong cash flow months, providing relief during seasonal periods where cashflow may be tight.
We encourage any customers who are facing difficulties to get in touch with us as soon as they can.
While our Agribusiness Partners will come and meet you on your farm, we know our customers sometimes want to talk to us in a branch.
So, by April 2025, all our branches will be open at least five days a week.
Branches in farming communities, like Fielding, Matamata, Ōamaru, Te Awamutu, Thames, Te Puke and Wānaka, have already made this transition. This will provide more face-to-face opportunities for farmers to talk to our bankers.
The drive for NZ agriculture to be more sustainable and reduce emissions isn’t just coming from media and government. Global customers such as Nestle and Danone are requiring New Zealand exporters to reduce emissions across the supply chain.
BNZ recently announced its investment in AgriZeroNZ.
The investment, alongside government and key industry players, will help provide emissions reduction tools for New Zealand farmers. It’s about backing farmers in one of their biggest challenges – reducing on-farm emissions while preserving their world-class productivity.
BNZ also provides Green Business Loans which can help farmers to finance their sustainability and resilience goals. These loans have discounted interest rates making it more affordable to invest in sustainability initiatives including climate or weather resilience.
There’s no denying that times are tough, but New Zealand’s rural communities are resilient.
They’ve faced tough times before and have come through stronger. Most of this is due to their grit and strength of character, and their ability to make the hard choices when circumstances demand them. At BNZ we’re proud to stand by our agribusiness customers through good times and bad.
Farming is cyclical in nature, and while times may be tough for some farmers now, there will be better times ahead.
Dave grew up on a dry stock farm in Hawke’s Bay, where he spent lots of time helping out in the sheep yards and shearing shed. He started at BNZ as an Agribusiness Partner in Pukekohe during 2004 and has held various roles at BNZ since then, currently as GM of Agribusiness & Corporate Banking.
Dave is passionate about seeing the primary sector go from strength to strength and ensuring agribusiness customers are able to prosper throughout New Zealand.
BNZ is an advertising sponsor of the Herald’s Agribusiness & Trade report.
