Jo Cuttance

Prices for sheep and beef farm inputs are continuing to rise, with a 3% increase between March 2018 and March 2019. This was up from the previous 12 months when input prices rose by 2%, according to Beef + Lamb New Zealand’s Sheep and Beef On-farm Inflation report.

Of the 16 farm input categories, 15 had price increases. The exception was weed and pest control, which decreased by 0.2%, although it had increased by 4.6% the previous year.

Shearing expenses had the greatest change in price, increasing 11.2%. This was up from 2.3% the year before. Following this was fertiliser, lime and seeds, which increased 6.2% compared to a decrease of 0.6% in the previous year.

Rates increased just over 5%, a jump up from the previous 12-month period which had a 2.7% increase. Fuel, cartage, insurance and rent all rose 4%. This was the biggest increase in rent in the past 10 years, the previous highest being 1.5% in 2016-17. Cartage’s increase of 4% was the highest increase in cartage since 2011-12 when it increased by 6.6%. On average over the past ten years cartage has increased 1.98% each year. This year’s fuel rise of 4% was lower than the previous two periods when fuel rose 18.8% in 2016-17 and 12.1% in 2017-18. Fuel prices over the past 10 years have varied greatly with decreases in 2014-15 of -21.7% and in 2015-16 with -12.7%.

Electricity increased at 3.7%, lower than the previous period’s electricity rise of 5.8%.

Animal health increased 2%, slightly below the yearly average increase of 2.2% over the past 10 years. Feed and grazing again increased at 3.3%, similar to the previous 12 months where it increased by 3.6%. Administration continued its consistent rise at 2.3% and wages at 1.7%, which is slightly above the average increase of 1.6% over the past 10 years.

Repairs, maintenance and vehicles increased by 1.4%, which was a lower increase than the previous two years of 2.7% in 2017-18 and 3.5% in 2016-17.

Depreciation rose 0.4% and interest 0.1%. Administration costs increased just over 2%.

Over the past five years prices for sheep and beef farm inputs are up 3.9%, and by 6.9% over the past 10 years. Consumer price inflation increased 5.5% over the last five years and 17% in the last 10 years. After a long period of being less than consumer price inflation, on-farm inflation exceeded consumer price inflation in 2019. Consumer price inflation was up 1.5% between March 2018 and March 2019. In comparison on-farm inflation was up 3% (including interest).

*Onfarm inflation is different to total farm expenditure, which takes into account the volume of inputs used on the farm.