Farmers paying 4.9pc more for goods, services

Beef and sheep farmers have seen prices paid for a trailer-load of goods and services used to operate their farms increase by 4.9 per cent in the year to January.

That was slightly above the previous year's 4.1 per cent increase, says Meat & Wool NZ's economic service.

Executive director Rob Davison said there were no decreases in any of the 16 categories of on-farm expenditure. This is similar to last year when there were increases across all categories. Prices increased by 24.4 per cent for fuel; 10.2 per cent for shearing expenses; 6 per cent for fertiliser, lime and seeds; 4.7 per cent for animal health; 4.6 per cent for repairs, maintenance and vehicles; and 2.5 per cent for interest.

The increase in fertiliser prices reflected high international demand for base material and shipping. Higher fuel prices led to a 7.5 per cent increase in cartage rates.

This is the fifth successive year local body rates, which rose 6.2 per cent, have increased at a higher rate than on-farm inflation. The five-year increase for local body rates was 23.3 per cent compared to 14 per cent overall on-farm inflation for the same period.

The increase in interest rates reflects overdraft, floating and fixed term mortgage interest rates for sheep and beef farm businesses. Excluding interest the underlying rate of on-farm inflation was 5.2 per cent and was up from 3.7 per cent for the previous 12 months.

The overall 4.9 per cent increase for sheep and beef farm input prices was the highest rate of increase since 2000-01.