The Moaning Chorus

This bit of grass is greener!

The idyllic country morning....one wakes up to the sweet sonnet of birds welcoming the new day and everything is wonderfully peaceful. Try living at Mad Bush Farm - the sweet (cracked) sonnets I get aren't the songs of little birds but the shriek of grumpy magpies, the grouchy cluck of Maggie May as she comes storming out of her egg hoard nest and a bunch of cats complaining breakfast is nigh. Beyond is the Terrorist letting me know she hasn't forgotten that the bottle was stolen away from her several weeks ago. Bottle must be returned or be mooed at for the next several years thank you very much and why isn't it forthcoming stupid human caregiver. Also human explain why I the Terrorist is not allowed to dwell amongst your wierd kind in that box thing I look longingly towards each morning...Just because I came into your box thing one morning and left a big green deposit on your kitchen floor doesn't mean I should be banned for life from entry. By the way that loaf of bread you stupidly left on the bench tasted very nice thank you very much. Such are the trials and tribulations of my mornings here on this crazy farm....
The old man turns 29 this year

Back in early 2005 a few months before Ed came in June my farm was being grazed by my neighbours five cows. All had calved in the November before and their babies were now large, fat and ready to be weaned. Easily enough done. We put the cows with the calves into the yards seperated them, then sent the cows on their way down the road with Fran and Ian their owners leading the way. Left behind and now put back into a secure paddock five little calves wondering where their Mums had gone. Of course the mournful mooings of lonely little calves missing mummy began an hour later and continued on through out the night. I wore ear plugs for three nights...so did my kids. Up in the top paddock where the calves had been put was an old piano. A piano you ask? What the heck is a piano doing in a paddock for goodness sakes. Yes you lot there at Mad Bush Farm must be truly mad after all. Well almost....An old barn used to be in the paddock but the wind had blown it over so Ian had kindly removed it and left behind was an old upright piano. The keys on it were up and down like a crazy staircase and its timbers were well past their use by date. So there in the paddock it stayed. One thing for sure it certainly caused a lot of speculation as to what the reasons were behind those strange new agers that had apparently moved onto that weed infested 12 acres with Kikuyu grass past their heads. First I knew about it. No it was a Mum and two kids that had moved there not New-Agers. That music coming out of my stereo wasn't whale song it was Metallica... The only way to shift that old piano would be with a digger. Solid and heavy it wasn't going anywhere. The calves though soon found some amusement with this worn old musical instrument. Used as a scratching post, a bowl em over target and for the resident magpies (akaThe Beagle Boys) a great roosting spot to watch over the proceedings. On early morning I had woken up to the sound of music. Piano music that was. The sound was coming from the top paddock...shoving on gumboots I trudged up the hill to a sight that had me staring in utter disbelief. Walking up and down the staircase like keyboard was a magpie singing his head off with two more perched on the piano's top watched by an appreciative audience of five calves who had forgotten all about mooing for mummy- instead they had been distracted by a little scene straight out of a cartoon. If only I had had my digital camera back then. It was a classic. I don't think my neighbours ever did get over that noisy laughter going on from over the back paddock. Those calves are now long gone - as for the piano? That ended up being shoved under a big pile of clay which is now part of my mother's garden. And that's the story of the Moaning Chorus.

They won't let me into that Box thing!


Regional fuel tax decision avoids colour coded diesel

“The spectre of UK-style colour coded diesel has been avoided by National dumping the previous Government’s proposed Regional Fuel Tax (RFT),” says Don Aubrey, Federated Farmers transport spokesperson.

If the RFT was introduced at a rate of up to 10c per litre of petrol and diesel, a form of refund system or way to identify tax-free diesel for non-road use would have been required. With off-road diesel representing 40 percent of all diesel sold and farmers using 90 percent of the diesel they purchase on-farm, this was a major cause of objection by the Federation. In other countries, like the UK, colour coding is used to denote taxed and tax-free diesel, creating, in itself, a policing issue.

“We congratulate the Government for scrapping the RFT as it was a dog with fleas. Rural folk would have subsidised urban transportation and that grates, since the term ‘rural public transport’ seems to be an oxymoron,” Mr Aubrey added.

“The RFT was as subtle a tax on transportation as a brick through a plate glass window. It would have hit users, particularly farmers, whose machinery never goes anywhere near a motorway, urban arterial road, or even an electric railway.

“If the Government had gone down the UK route and colour coded off-road diesel, so it couldn’t be used or sold for on-road use, some form of policing and random checks would have been necessary.

“Imagine the expense and waste of time if police or traffic wardens were to swoop down on a farmer in places like Gore, just to check they had the right colour diesel in their fuel tank.

“I think a ‘diesel police’ or a refund bureaucracy would have been an expensive nightmare negating any financial benefit the RFT might have delivered.

“New Zealand has a remarkably simple and effective system of road user charges, so why change something that isn’t broken?” Mr Aubrey concluded.

Related articles

9.5 cent local petrol tax could be dumped


It wasn’t third, fourth or even fifth time lucky for the 2009 Bay of Plenty Sharemilkers of the Year John and Kim Wakefield – it was the sixth time the couple had entered the competition.

“We have kept entering as we think it’s a great way to benchmark ourselves against others, it provides good exposure for advancing in the dairy industry and we meet new like-minded people.”

The couple is currently 50% sharemilking 360 cows on 105ha for Georgy Angland at Awakeri, near Whakatane. They won $15,200 in cash and prizes.

“A strength of our business is that we have a good understanding of our financials through forecasting, monitoring and updating our records. We also utilise the resources and professionals involved in our business.”

The Wakefield’s have been in the industry for 20 years. John joined as a school leaver and progressed from a cadet through farm management and lower order sharemilking to 50% sharemilking. Their goals are to increase equity so they can purchase their own farm with sufficient size to employ staff to undertake the farm’s day-to-day operations.

Whakatane 50% sharemilkers Jon and Steph Russell placed second in the 2009 Bay of Plenty Sharemilker of the Year competition, winning $6100 in cash and prizes. Pongakawa sharemilkers Scott and Charlotte Jones placed third, winning $3800 in cash and prizes.

The 2009 Bay of Plenty Farm Manager of the Year winner, Phil Moeke, and 2009 Bay of Plenty Dairy Trainee of the Year, Mark Nicholas, were also announced at the awards dinner held at the Te Puke Citizens Club last night.

All three winners will now compete for the New Zealand Sharemilker of the Year, New Zealand Farm Manager of the Year and New Zealand Dairy Trainee of the Year titles and a prize pool of more than $100,000 in Wellington on May 16.

The New Zealand Dairy Industry Awards are supported by national sponsors Westpac, Honda, DairyNZ, Ecolab, Federated Farmers, Fonterra, LIC, Meridian Energy, Ravensdown and RD1, along with industry partner Agriculture ITO.

The 2009 Bay of Plenty Farm Manager of the Year Phil Moeke spent 22 years in the refrigeration industry specialising in farm milk vats before changing career in 2005 to become a farm assistant.

“I am really passionate about what the dairy industry can offer people with no experience – in a relatively short time you can be well on the way to achieving your goals.”

Mr Moeke is currently managing a 270ha farm milking 1000 cows at Edgecumbe for the Gow Family Trust. He received $4900 in cash and prizes for his win.

He says the size of the job allows for great learning opportunities in regards to farm and staff management. “There is also a great culture created by the Trust to encourage personal development, training and inclusiveness of families.

“My future farming goals are to have a sharemilking business in June 2010 and to be out of the shed by 2013.”

Whakatane farm manager Aaron Johnston placed second, winning $2500, and Warren and Jo Lee, also Whakatane farm managers, placed third winning $1250.

Bay of Plenty Dairy Trainee of the Year, Mark Nicholas, 32, has made quick progress since entering the dairy industry less than two years ago. Already he has secured a sharemilking position with a herd of 280 cows at Tokoroa from June.

Currently he is an assistant farm manager on a 140ha Whakatane farm milking 500 cows for Mike Mexted.

“I enjoy being in a position where I can offer ideas and then implement them, even though I am new to the industry. I have a great relationship with the farm owner, manager and farm consultant where we can all sit down and talk about farm related issues.”

Mr Nicholas says achieving his National Certificate in Agriculture through Agriculture ITO had helped him secure his sharemilking position and set him up both financially and in his dairy career. He won $2420 in cash and prizes.

There was a high calibre of dairy trainee entries, so the judges highly commended trainees Jamie Burt and Adam Coley.

Bay of Plenty Sharemilkers of the Year John and Kim Wakefield will host a field day on Thursday March 26, while Bay of Plenty Farm Manager of the Year Phil Moeke will host a field day on the Edgecumbe farm he manages on Friday April 3. Further details on the winners and field days can be found on www.dairyindustryawards.co.nz.

Sharemilker Merit Awards:

  • Blackman Spargo Legal Audit Award – Andrew & Robyn McLeod
  • Honda ATV Safety Award – John and Kim Wakefield
  • DairyNZ First Time Entrant Award – Jon & Steph Russell
  • Ecolab Farm Dairy Hygiene Award – John & Andrea Winmill
  • Federated Farmers of New Zealand (Inc) Leadership Award – John & Andrea Winmill
  • LIC Recording and Productivity Award – Jon & Steph Russell
  • Meridian Energy Farm Environment Award – John & Kim Wakefield
  • Ravensdown Pasture Performance Award – John & Kim Wakefield
  • Westpac Business Performance Award – John & Kim Wakefield

Farm Manager Merit Awards:

  • DairyNZ Human Resource Management Award – Phil Moeke
  • RD1 Farm Management Award – Aaron Johnston
  • Westpac Financial and Planning Award – Phil & Nicki Vallance


Hawks,Family photos with the Terrorist and the garden

Mr Hawk decided to go hunting the Mynah birds this afternoon. Unfortunately for him the Mynah Clan were out in full force shrieking the farm down and annoying not just me but my kids as well. I hate Mynahs they're a real pest around here. Lately they seem to have grown in numbers so I think a man with a gun will soon be in order for this nasty avian crew. I got this shot just as one of the Mynah birds were trying to attack Mr Hawk over the bush. He got away of course. Hawks I don't mind mynahs can go somewhere else...
The Terrorist didn't like being nabbed by my girls to have a family photo taken!

And Sasha had a big horse smile on her face!
And last but not least that vegetable garden that grew weeds for two years now has a five wire fence around it and some vegetable seeds planted! More to do tomorrow but now those chickens can't destroy the plants or get in - not with 3000 volts around it they can't.

On a sadder note Rachel over at Kyfarmlife has been having a big worry over little Radish. He's a little foal born two days back, but now Radish doesn't seem to be doing too well. Rachel has had hardly any sleep taking care of this little guy. He's gorgeous. His Sire Buck is a Rocky Mountain Horse and his dam Georgia is a Tennessee Walker. Nice little colt. I really hope he makes it. Drop over and wish Rachel and Radish well I think Rachel could really do with the support on this one.

AgResearch and Lincoln University merger applauded

“Federated Farmers applauds both Lincoln University and AgResearch. This is very positive for New Zealand agriculture and the kind of innovative approach that will help grow the New Zealand economy,” says Don Nicolson, Federated Farmers President.

“At the recent Prime Minister’s Job Summit, Federated Farmers listed Research and Development as one of our four key suggestions to grow jobs. It stands to reason since 64 percent of everything we export is food.

“The proposed merger plays to New Zealand’s natural competitive advantage. It backs agriculture by recognising the future of New Zealand is agriculture.

“Federated Farmers believes the proposed merger will result in research being focused on productivity while eliminating research duplication. This means faster and smarter outcomes for New Zealand’s farmers.

“If the merger succeeds, it will create a research leviathan. One of the biggest in the world and based right here in New Zealand.

“That will give New Zealand the means to retain our best brains by offering talented people an integrated career route. With a probable global standing the best agricultural scientists in the world will choose New Zealand.

“What this also represents is an innovative future model for our other universities and crown research institutes to follow,” Mr Nicolson concluded.

AgResearch and Lincoln University Merger Prospect

The Chairman of AgResearch and the Chancellor of Lincoln University today announced that the Crown Research Institute and the University support, in principle, the merger of the two organisations to create a substantially enhanced Lincoln University with a specific and deep focus on land utilisation and associated environmental and social integrity throughout New Zealand.

AgResearch and Lincoln University will now embark on a combined consultative process before concluding whether to recommend to Cabinet a full merger. The proposal is to create a world-class, land-based University supporting research, education and extension that is focused on New Zealand’s vital primary industries.

“This would create an internationally outstanding entity, which would rank in the world’s top five of its type,” said Tom Lambie, Chancellor of Lincoln University.

“New Zealand needs to lift its rate of productivity growth and the obvious place to start is with the land-based industries. Through the creation of a world-class, internationally ranked, 21st century land-based University, the performance of New Zealand’s land-based industries will be enhanced substantially,” said Mr Lambie.

AgResearch Chairman Sam Robinson says when AgResearch was formed it brought together animal sciences from the Ministry of Agriculture and plant sciences from the DSIR which allowed, for the first time, the development of a coherent scientific view of how a farm operates.

“This merger will go that one vital step further and translate all that knowledge and technology that our scientists produce into coherent education and training for immediate industry benefit along the entire value chain. AgResearch has more scientists than any other government-owned research organisation in New Zealand and merging with Lincoln University will provide a more stable base for New Zealand’s most important research and development, and enhance teaching activity,” said Mr Robinson.

Last of the big Official Cash Rate cuts?

“Federated Farmers congratulates the Reserve Bank for its 50 basis points cut to the OCR this morning,” says Don Nicolson, President of Federated Farmers.

“The Reserve Bank has acted decisively in light of the international situation but as the OCR gets ever closer to zero, it is clear time has come to ease off on large cuts to the OCR.

“As the Prime Minister said in The Wall Street Journal, New Zealand must grow its way out of recession. That’s why Dr. Bollard has joined with Federated Farmers to reiterate the importance of lending to sound businesses. Banks must also pass on the large OCR cuts to their business customers.

”While some economists were picking a two percent OCR by June, or even by April, Federated Farmers is increasingly cautious.

“Simply following the global pack towards lower official cash rates may start working against the New Zealand economy. New Zealand has far less exposure to manufactured consumer goods than almost any other OECD country.

“Since everyone eats food, Federated Farmers is increasingly buoyed by positive numbers coming through for our agricultural exports. The Federation expects the bottom will be reached for most commodities by mid-year with recovery towards the end of 2009 and the first half of 2010. Farmers are now seeing light at the end of the tunnel.

“For many farmers, a more pressing problem for the Reserve Bank is persistent inflationary pressures arising from the non-tradable sector, such as local and central government spending and charges.

“The Federation is concerned non-tradable inflation could be boosted by overly loose monetary policy as the economy starts to recover in the medium term. More so with the OCR and 90 day bill rates at historic lows, both totally justified under current conditions.

“Another issue that needs tackling is the delivery of interest rate cuts to businesses. The latest survey by Federated Farmers showed that after two cuts totalling 300 basis points, only 156 basis points had been passed onto farm business overdraft facilities.

“Given all New Zealanders depend upon agriculture in some way, the banks need to be more transparent and open about the way farm business debt facilities are being structured,” Mr Nicolson concluded.


Attacking the old Vegetable Garden under supervision that is

The Garden Supervisor

It's taken me over a week to finally turn over all of the soil in what used to be our main vegetable garden. Back breaking work when you've left it for two years growing nothing but weeds taller than you are and the tap root systems to match. I had forgotten just how big it really was - large enough to feed myself,my girls, my Mum and always extra to pass on to friends and family. At last I've reclaimed it from the weeds. The soil has been well fertilised with blood and bone. I guess the earth worms will love it. So will the chickens. Until I put in the last few wires and connect the fence around the garden to the mains unit those chickens will be very busy getting what they can.
I'm hoping to have all the fence finished by tomorrow if the weather doesn't decide to pack up and we get more showers coming in along with the strong south westerly that's been shredding the trees for the last two days. Cold and horrible which is telling me Autumn is here. Hopefully the temperatures won't drop too much. I'm putting in peas and parsnips for starters. Then go from there.

In the other small garden.....

The weak sick looking tomato plants I had finally put in several weeks ago have benefitted a lot from a huge dose of fertiliser and some TLC. At last I actually have tomatoes on them - green but at last we're getting something! It's probably far too late in the year now to get many off these poor plants I'm hoping for a few more weeks. The Tyres keep the chickens from digging around the roots...

The Banana Pepper I put in seems to be doing okay I didn't realise it was a mildly hot one and had mistaken it for a sweet variety but I'll make use of it in a stew or a casserole. Jennifer from A Dairy Perspective posted about this great book Country Wisdom & Know-how that has all kinds of things for living off the land there's even instructions on how to make a root cellar. Check it out here. And even if you don't have a farm it's still worth checking out. Read Jennifer's post to find out more. Oh well time to make dinner and tell the Terrorist I'm not doing anymore gardening today.

Flaws in Fonterra’s Effluent Improvement System

“Fonterra’s proposed new Effluent Improvement System (EIS) has good intentions, but the detail is flawed,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“Federated Farmers feels it is important to remind people that a vast majority of dairy farmers play by the rules. Only a very small number have effluent management issues. The rest are doing an exceptional job despite the overbearing rules and changing expectations forced on them by regional councils.

“What distracts farmers from the good intent of this proposal is the idea of being fined twice - once by regional councils and then again by Fonterra.

“Instead of introducing a milk payout deduction system for those who receive an infringement notice or prosecution from a regional council, Federated Farmers suggests Fonterra put its resources and any penalty regimes in place to avoid regional council involvement.

“Federated Farmers firmly believe that these few bad farmers have to improve their effluent management systems. If they don’t show signs of sensible improvement then regional councils have the power to prosecute,” Mr McKenzie concluded.


River & Company


I think River is wondering why her gut has become the size of a small water tank and it's becoming a little harder to get up the hills. She's rising three this year hard to believe she was that small little calf I kept alive for ten days when she had a terrible case of scours then salmonella on top. The cause we weren't quite ever sure of. A lot of sleepless nights and perseverance had River recovering and she's done well ever since. I haven't had trouble with scours since I put all of my calves straight into the paddock with covers on and out of a shed environment.
Micah the Guts
Micah has done his job. All three cows are in calf - now he's been eyeing up the Terrorist from across the electric fence and finding he's going to get nowhere. Fortunately he's a very small bull. I doubt he'll grow much more but he could prove me wrong and end up as a monster like his father big Micah the Hereford was. This little bull has remained quiet but...we'll see as time goes on if he stays quiet. If he doesn't the butcher will be out with his gun and Micah will end up in our freezer. I raised him by hand but I'm also a realist when it comes to what needs to be done. We used him for siring the first calves from our heifers since he was small and it would reduce the risk of the calves ending up being too big to be calved.
Sometimes I think how lucky my girls and I really are to have our farm. So many others would like one but they either can't afford it or they have no way of being able to make that move. What gets me is that for some reason a snob value is applied to small farms like mine. In New Zealand they're called Lifestyle Blocks. I suppose mine is up to a point. Bridget who has Cabbage Tree Farm would be in the same position. I'm not farming my land to make a living from it (because it can't) but it does feed my family and does give us enjoyment. I have many friends who are in Dairying,cropping and beef stock and they all enjoy their lifestyle immensely or they wouldn't be farming. Sadly the generalised label of Lifestyler seems to be applied in reference to a small minority that tend to have no idea about rural living or how to go about asking their farmer neighbours why perhaps those cows are in that particular paddock. There was a case here in New Zealand where a Diary Farmer had his cows moved by his lifestyler neighbour because they were 'spoiling the ambience'. In another case here in Northland a farmer had applied chicken poo to his land and his lifestyler neighbours had complained bitterly about the smell. The farmer ended up being fined. Chicken poo stinks I'll agree there but the poor farmer was only trying to take care of his pasture - that's where I say hey I'm no lifestyler sunshine. My Grandfather was a Dairy Farmer and all of us kids were raised to shut gates, get used to the stench of winter silage and not go bothering the cows that were close to calving. My neighbour Terry is a great guy and his farm manager Peter has given me great advice on many occasions when I've needed it. Maybe I'm a cynic but these tourist places they have with the sheep and stuff just aren't a true reflection of New Zealand rural life. No the real thing is better - or at least I think so anyway.



The 2009 Waikato Sharemilkers of the Year Craig and Brooke Littin say their strong relationships with past and present farm owners are a key factor in their success.

“They are the people we look to for advice and support – they are our mentors.”

The Littin’s, both aged 32, who won $10,500 in cash and prizes, also value their professional relationships and opportunities to surround themselves with people with knowledge and skills to offer.

The couple is currently 50% sharemilking on a 168ha Putaruru property owned by John and Kerry Wood targeting 260,000kg milksolids this season ending May 31.

It was the third time they had entered the competition, doing so to benchmark themselves against other sharemilkers, to gain constructive advice and to network with other progressive and positive people.

“We have always had the philosophy that knowledge is empowering, so we are constantly upskilling ourselves and staff. Craig recently completed the Kellogg’s Rural Leadership Programme and this gave him the opportunity to network with a wide range of people from the agriculture industry and to work on his public speaking skills.

“Our motto has always been to pay for advice once, then to do it ourselves.”

Gordonton 22% sharemilkers Scott and Alicia Paterson placed second in the Waikato Sharemilker of the Year, winning $5500 in cash and prizes. Morrinsville 25% sharemilkers Hannes and Lyzanne du Plessis placed third, winning $3000 in cash and prizes.

The 2009 Waikato Farm Manager of the Year winner, Zarsha Osborne, and 2009 Waikato Dairy Trainee of the Year, Blair Jackson, were also announced at the awards dinner held at Bledisloe Hall, Mystery Creek, last night.

All three winners will now compete for the New Zealand Sharemilker of the Year, New Zealand Farm Manager of the Year and New Zealand Dairy Trainee of the Year titles and a prize pool of more than $100,000 in Wellington on May 16.

The New Zealand Dairy Industry Awards are supported by national sponsors Westpac, Honda, DairyNZ, Ecolab, Federated Farmers, Fonterra, LIC, Meridian Energy, Ravensdown and RD1, along with industry partner Agriculture ITO.

The 2009 Waikato Farm Manager of the Year Zarsha Osborne is making quick progress in the industry and bagging awards along the way – she won the Waikato Dairy Trainee of the Year title in 2007.

Ms Osborne is managing an 110ha Cambridge farm for Berg and Amanda Bergerson milking 380 cows.

“Entering the competition opens up a lot of opportunities that I might have missed otherwise and it’s a great way to put yourself out there. It’s free advertising.”

She and her partner Michael Richardson aim to own their own 600-cow farm within 10 years.

Tirau farm managers Pieter and Beth Ackermann placed second in the 2009 Waikato Farm Manager of the Year, winning $3500 in cash and prizes. Kevin White, a Te Aroha farm manager, placed third winning $1750 in cash and prizes.

Waikato Dairy Trainee of the Year Blair Jackson is an assistant farm manager on a 260ha Morrinsville farm owned by Keith Holmes milking 900 cows. He was previously a national parts manager for Komatsu Forklifts and changed careers to enjoy the lifestyle benefits dairy farming offered him and his family.

For the past three years Mr Jackson has been studying for a National Certificate in Agriculture through the Agriculture ITO, helping his confidence and competency on the farm.

“I believe I now have the ability to manage a farm and apply new techniques to increase production and profit. I have found the combination of theory and practical implementation very valuable.”

Waikato Sharemilkers of the Year Craig and Brooke Littin will host a field day on Wednesday March 24, while Waikato Farm Manager of the Year Zarsha Osborne will host a field day on the Cambridge farm she manages on Tuesday March 31. Further details on the winners and field days can be found on www.dairyindustryawards.co.nz.

Sharemilker Merit Awards:

  • Honda ATV Safety Award – Carlos & Bernice Delos Santos
  • Animal Health Centre Animal Health and Welfare Award – Scott & Alicia Paterson
  • Piako Tractors Human Resource Management Award – Craig & Brooke Littin
  • Allied Farmers Best Variable % Award - Scott & Alicia Paterson
  • DairyNZ First Time Entrant Award – Hamish Ferguson
  • Ecolab Farm Dairy Hygiene Award – Hannes & Lyzanne Du Plessis
  • Federated Farmers of New Zealand (Inc) Leadership Award – Craig & Brooke Littin
  • LIC Recording and Productivity Award – Craig & Brooke Littin
  • Meridian Energy Farm Environment Award – Scott & Alicia Paterson
  • Ravensdown Pasture Performance Award – Adrian & Karyn Daines
  • Westpac Business Performance Award – Scott & Alicia Paterson

Farm Manager Merit Awards:

  • Effluent Irrigation Services Best Endeavour Award – Tristan & Karen Dalley
  • DairyNZ Human Resource Management Award – Pieter & Beth Ackermann
  • RD1 Farm Management Award – Kevin White
  • Westpac Financial and Planning Award – Pieter & Beth Ackermann

Banks overdraft rates remain stubbornly high

Farm overdraft interest rates remain stubbornly high, despite major cuts to the New Zealand Official Cash Rate (OCR) and steep falls in 90 day interest rates.

The latest snapshot survey by Federated Farmers of 123 members revealed the average farm business overdraft rate had been reduced by just 54 basis points since the end of January. This survey was conducted between 17 and 25 February 2009, three weeks after 150 basis points were cut from the OCR on 29 January. The survey discovered that the average overdraft rate for farm businesses was 9.62 percent.

“Since 4 December 2009, 300 basis points have been cut from the OCR and 90 day interest rates have fallen from 5.36 percent to 3.04 percent. Yet farm businesses, on average, have seen only 156 basis points of this translated into their overdraft facilities,” says Don Nicolson, Federated Farmers President.

A number of farmers reported in the survey that they had been notified in mid-February that further cuts were on the way from 3 March. This is great news, but many were frustrated with the period of time it took for the cuts to come into effect. With further steep cuts to 90 day interest rates in recent weeks, the banks must urgently review their lending rates and quickly implement any cuts.

Farms are highly seasonal businesses and overdraft interest rates are crucial for farmers’ cash-flow. High interest rates are squeezing farm profitability and mean farmers have less to spend in their local economies.

“In the case of Fonterra, it has changed the structure of this season’s payout. Part of the value return component due in April has now been folded into one payout in October. Incremental payouts due to farmers have also been delayed until the end of the season in June,” Mr Nicolson continued.

“As for the Westland Dairy Cooperative, it is now expected that there will be no winter payout for their supplier shareholders.

“While seasonal and overdraft facilities make up a part of the $44 billion lent to the agricultural sector, stubbornly high interest rates at this point in the economic cycle only serve to frustrate farmers.

“The Reserve Bank’s February Retail Interest Rates on Lending and Deposits highlights the rapid drop in what residential mortgagees are paying, which is down by 414 basis points since August 2008. Although we are not strictly comparing like with like, farmers are concerned that residential mortgage holders are enjoying the fruits of intense competition while farm businesses are not. This is occurring as the banks face pressure from Federated Farmers and Reserve Bank Governor, Dr Alan Bollard. The aim must be to share these benefits with farmers and other small businesses,” Mr Nicolson concluded.

Federated Farmers is keen to see greater transparency and competition in the farm and small business lending markets. We are willing to discuss these prospects with the banking sector and, if needed, the regulators.



The results of the first Federated Farmers survey showed that farmers overdraft interest rates had fallen by 0.78 percentage points in response to the 150 basis point cut in interest rates on 4 December.

Since then the Reserve Bank has again cut the OCR by 150 basis points (on 29 January) and Reserve Bank Governor Alan Bollard has repeated his call for banks to pass on interest rate cuts to their customers, saying …"To ensure the response we are seeking, we expect financial institutions to play their part in the economic adjustment process by passing on lower wholesale interest rates to their customers.”

The new survey was in the field from 17-25 February 2009.

Federated Farmers received 123 usable responses to the survey from its focus group of farms. We consider this to be an adequate response rate.

The average overdraft interest rate faced by farmers on 29 January 2009 was 10.16%. At the time the survey was conducted (17-25 February 2009) the average rate was 9.62%.

Therefore, the average difference between the respondents’ overdraft interest rates on 29 January and when they responded to the survey was 0.54 percentage points. This means that just over one third of the 1.5% cut to the OCR on 29 January has been passed on to farmers through their overdrafts.

Broken down by farm type:

· For Meat & Fibre farmers (n=42) the average difference was 0.67 (from 10.13% to 9.46%).

· For Dairy farmers (n=41) the average difference was 0.48 (from 10.06% to 9.58%).

· For Arable farmers (n=6) the average difference was 0.22 (from 10.75% to 10.53%).

· For other/mixed farmers (n=35) the average difference was 0.50 (from 10.22% to 9.72%).

NOTE: Some respondents mentioned that their bank had announced plans to decrease their overdraft rates in the future. However, this survey only accounted for rates at the time of the response.

The survey also asked… “Does your bank charge an additional margin rate(s) above the base rate?”

· 50% of respondents said NO

· 30% respondents said YES

· 20% of respondents either did not know or did not respond

Of those who answered yes and responded with a single number, the average margin was 1.29 percentage points.

The survey also asked… “Have there been any further changes to the conditions of your loan?”

· 76% responded NO

· 6% responded YES

· 19% did not respond

Combining the results of the first and second Overdraft Interest Rate Surveys we find:

On 4 December 2008 the average overdraft interest rate for farmers was 11.18%.

On 17-25 February (at the time the second survey replies were received) the average overdraft rate for farmers was 9.62%.

Between 4 December 2008 and 25 February 2009 farmers’ overdraft interest rates have fallen by 1.56%. This is just over half of the 3% fall in the OCR during this period.

When we break this down by farm type we find:

· For Meat & Fibre farmers the average difference was 1.58 (from 11.04% to 9.46%).

· For Dairy farmers the average difference was 1.67 (from 11.25% to 9.58%).

· For Arable farmers the average difference was 1.14 (from 11.67% to 10.53%).

· For other/mixed farmers the average difference was 1.39 (from 11.11% to 9.72%).


1. What was your overdraft interest rate on 29 January 2009?

2. What is your overdraft interest rate now?

3. What is your farm type? (e.g. dairy/sheep/arable)?

4. Does your bank charge an additional margin rate(s) above the base rate? If yes, please specify:

5. Have there been any further changes to the conditions of your loan? If yes, what?


My silly Farm Diary

Everyone with a farm of any description likes to keep a Farm Diary. In it gets recorded the fertiliser dates, the calving, the lambing and the drenching and anything else important such as pasture growth rates, mating and machinery maintenance. I have a serious Farm Diary that does have those things recorded then there is my silly Farm Diary. The one that I love to sit down and do especially when I've had a couple of bad days. Yesterday was a complete disaster. The car decided it wasn't going to start and some family stuff got in the way. This morning has been even worse. The electric fence decided to start backfeeding on the current and a horse got out. I had turkeys trying to destroy my yet to be planted newly restored vegetable garden (parsnips are going in today) and on top of everything else my youngest has presented me with a horrendous pile of dirty washing! Growl. I've got a heap of stuff to get done today and I was hoping to get over to see Amy before the 21st century was over..(Sorry Amy) I've still got a fence to repair today and the Terrorist at least has been drenched. River my eldest cow (all of rising 3 years old) has started to spring in the udder which means her calf is due in about three to six weeks. This will be her first so I'll be having to keep a closer eye on her. So here is a page from my silly farm diary complete with the turkey with boogly eyes and a hedgehog going somewhere...Maggie had sent the turkey off packing..she stomps her feet and crows like a rooster it's hilarious! That's chickens for you. We all get bad days sometimes in threes or more. I'll put this down to one of those things that happen. Maybe I'll go and get that X-plow and use it in my youngest daughter's room?

Anyone else had bad days lately where they could just go somewhere and scream? Let me know I'd love to hear your stories of bad days and maybe good ones too.LOL! Anyway I'm sort of smiling and I guess I'll smile more once I've got a couple of more things done.