Latest / Best of Business / Jamie Mackay: The Country host on the tough economic climate impacting Kiwi sheep farmers

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Jamie Mackay: The Country host on the tough economic climate impacting Kiwi sheep farmers · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalks. There'd be follow
• 0:12
  Speaker 1: this and our wide range of podcast now on iHeartRadio with.
• 0:16
  Speaker 2: Us Now as Jamie mckaye, host of the Country.
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  Speaker 3: He Jamie, Hello, cousin Heather.
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  Speaker 2: Oh mate, It's tough to be a sheep farmer, isn't it.
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  Speaker 3: Yeah? Wow, Maybe I dodged a bullet there, because if
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  Speaker 3: the Rural Bank had lent me ninety grand way back
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  Speaker 3: in about nineteen eighty nine or ninety when I wanted
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  Speaker 3: to buy one hundred acres forty hectares of the neighboring
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  Speaker 3: block to expand my farming operation, if they'd lent me
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  Speaker 3: the money hither, I'd probably still be a sheep farmer,
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  Speaker 3: and I might be a bit bitter and twisted about
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  Speaker 3: doing that because the returns are abysmal. Wait for this stat,
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  Speaker 3: Southern sheep farmers. That's me if i'd stayed down in Riversdale,
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  Speaker 3: and I know you've been to the home farm there.
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  Speaker 3: They have to be They're getting a six point nine
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  Speaker 3: percent increase in profit. And while that sounds wonderful, guess
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  Speaker 3: how much they're earning for their whole year's work. Twenty thousand,
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  Speaker 3: two hundred dollars, and that's before that they wouldn't even
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  Speaker 3: pay you. You and barries like dinner.
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  Speaker 2: Well, I mean that is not far off. Like a
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  Speaker 2: big family. That's the grocery bill.
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  Speaker 3: Oh and more, I would have thought, to be honest.
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  Speaker 3: So from your twenty thousand, two hundred dollars, you've got
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  Speaker 3: to pay for your drawings obviously, you've got to live,
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  Speaker 3: and on top of that, your tax, your principal repayments,
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  Speaker 3: your capital expenditure obviously, and really tough times. Not much
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  Speaker 3: of that happens, but it is really tough for sheep farmers.
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  Speaker 3: And the further south you go probably the worst off
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  Speaker 3: they are in some ways. And because this is the
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  Speaker 3: new season outlook from Beef and Lamb New Zealand and
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  Speaker 3: it's talking about sheep and beef, and the further south
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  Speaker 3: you go, the more proportion of sheep as opposed to beef.
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  Speaker 3: So these are the lowest recorded profits on record, inflation adjusted,
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  Speaker 3: and that goes back to the nineteen eighties when we
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  Speaker 3: had rogerenomics. So really, really tough, and they're not being
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  Speaker 3: helped much heather by the banks. I did a totally
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  Speaker 3: unscientific pole today on the country and you know, it
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  Speaker 3: makes me almost makes you want to cry. Some of
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  Speaker 3: the lending rates and mortgage rates and OD rates these
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  Speaker 3: farmers are paying. I had a contract milker who was
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  Speaker 3: paying thirteen and a half percent of an overdraft fee.
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  Speaker 3: This guy's getting up every morning milking two thousand cows,
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  Speaker 3: employing ten full time staff, four casuals. He's spending four
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  Speaker 3: months of his twelve months of the year in overdraft.
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  Speaker 3: It's killing his operation. These are the people we should
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  Speaker 3: be encouraging, you know, to drive the economy. The floating rates,
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  Speaker 3: to go by my unscientific pole for farmers, between seven
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  Speaker 3: and eleven percent. But the OD rates, the overdraft rates
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  Speaker 3: are the real killers there, between nine which is a
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  Speaker 3: pretty good deal probably, and up to fourteen or fifteen percent. Look,
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  Speaker 3: federated farmers are on the warpath. I'm on the warpath too,
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  Speaker 3: because I reckon the banks for having us on. Is that?
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  Speaker 2: How much higher is that than what you would be
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  Speaker 2: paying as a towny with a residential loan?
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  Speaker 3: Well, heather, as fate would have it, I went on
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  Speaker 3: to my own personal bank website and looked at that
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  Speaker 3: I could get. I could get a floating deal with
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  Speaker 3: my bank at eight point three nine percent. No one's
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  Speaker 3: literally no no, no one's literally doing it. I can
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  Speaker 3: go out and borrow for eighteen months at five point
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  Speaker 3: nine to nine percent. I had the example today of
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  Speaker 3: a very well established farmer's worth. His equity would be
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  Speaker 3: in the tens of millions, and he has just helped
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  Speaker 3: his son in dned into a house. This guy's been
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  Speaker 3: with the same bank for thirty years and believe it
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  Speaker 3: or not, the son who's got bugger or equity, dad's
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  Speaker 3: helped him into the house, got a two percent lower
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  Speaker 3: deal than this guy has, who's probably one of the
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  Speaker 3: leading clients for his bank. You know, we've got something,
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  Speaker 3: We've got something wrong here. We just need to we
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  Speaker 3: need to encourage the productive sector.
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  Speaker 2: Yeah, Jamie, I think you're onto something man. Thank you
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  Speaker 2: so much, appreciate it. Jamie Mackay, Host of the Country.
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