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Margins Drop as Drought Hits Northland

06 March 2013

NEW ZEALAND – The Ministry for Primary Industries has issued adverse event declaration for the Northland area as drought conditions have started to take their toll on farm production and profit.

Dairy farmers in Northland are going to have NZ$13 million less income for February due to milk production decrease and low prices, according to Dairy New Zealand who have been distributing weekly newsletters with practical drought advice for farmers.

Industry groups have said that other regions in the north south-island area are likely to follow soon.
Help has come in the form of tax reliefs and consultancy help. The Rural Support Trust, Federated Farmers, Banks, Rural Professionals and the Ministry for Primary Industries are available to turn to, Dairy New Zealand regional manager, Craig McBeth has urged.

“The best support can be talking to your neighbours and just hearing what others are doing. That’s what we’re trying to facilitate through our farmer networks.”

“We’ll also be running some dry summer events to give more detailed advice and support. Farmers should contact their local DairyNZ consulting officers for updates on when and where these events will be held,” added Mr McBeth.

The adverse event declaration means that his support structure is available to farmers, according to Matt Long, Federated Farmers Provincial President.

“What it means is that organisations like the Rural Support Trust Northland can now coordinate and deliver farm advisory and counselling services. As this is a highly stressful time for farmers and their families, access to counselling services is invaluable.”

“Another thing the declaration triggers is flexibility from Inland Revenue. It is not about being excused obligations but the ability to set up individual plans with it; plans that need to be organised through a farmer’s agent or accountant,” added Mr Long.

Farmers in drought hit areas are being urged to talk to their accountants in order to benefit from income equalisation discretions.

The Farmers’ Income Equalisation scheme provides a mechanism by which farmers can smooth the level of their taxable income. The smoothing is achieved by the fact that deposits into the scheme are tax deductible while refunds from the scheme are taxable.

Milk yields for February are around 20 per cent down in Northland and 15 per cent down in Waikato. DairyNZ has issued advice to Northland and other dairy farmers experiencing dry conditions is to:

• Look after yourself and talk with other farmers in your area

• Monitor and record your cow body condition.

-Make sure you know how to do this or get an expert to help

• Focus on milking on with a core group of cows until it rains

• Assess how you can destock

• Have a plan around feed, financials, stock and communicate the plan to your team (family, staff, consultant, banker). Don’t be afraid to change to Plan B if things change

• Manage young stock on and off the farm

• Talk to your grazier

• Attend a DairyNZ dry summer field day

• Make the best use of your rural professionals.

TheCattleSite News Desk

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