Farmers worry about El Nino weather pattern, but predictions by banks differ

New Zealand climate scientists say it is too early to be certain how intense the effects of an El Nino weather pattern will be this summer.

The US Climate Prediction Centre said yesterday warm water in the Pacific Ocean would definitely bring the El Nino weather pattern this summer. It said high ocean temperatures in the tropics meant the El Nino system would stretch into 2007.

But MetService spokesman Bob McDavitt said there were already El Nino-like conditions in the Pacific Ocean. Water temperatures needed to rise further for it to qualify as a full-blown El Nino event.

New Zealand's National Institute of Water and Atmospheric Research said last week the chances of a weak El Nino pattern this spring were 50 per cent, double the usual probability.

Farmers fear the weather pattern is still likely to push eastern parts of New Zealand toward dry conditions.

Federated Farmers' North Otago president Bruce McNab said spring would be the worst time for a dry spell, as lambs and calves need good pasture to encourage growth.

Though serious east coast droughts do not occur in every El Nino, some banks were already looking at the likely impacts this summer. Westpac has said an El Nino pattern would be bad news for farmers, with potential for agricultural production to fall by up to 7 per cent compared with growth of 3.9 per cent in the year to March 2006.

This could pare back economic growth to 1 per cent in 2007, if weak domestic spending was reinforced by a weak outlook for agriculture.

But the BNZ's economists have been playing down the chances of significant effects: they said the risk of an El Nino summer is modest.

The bank is wary about predicting commodity price rises, saying dairy prices may make only modest improvements over the next year and the chances of a milksolids payout better than this year's $4.10 a kilogram has "limited potential". It says it is too early to say what will happen with Christmas lamb sales in Britain.

Treasury has said it is likely GDP growth in the year to March 2007 will be 1.5 per cent, but Goldman Sachs JBWere economist Shamubeel Eaqub has said the economic growth rate will slow to 1 per cent if low rainfall reduces farm production and fails to fill the hydro lakes used for electricity generation.

- NZPA