North Canterbury News: April 28, 2022

RURAL LIFE
22 North Canterbury News, April 28, 2022
Pay areason to look
at agricultural career
An average growthof13
percent in pay packages in
the last two years is another
reason for moreNew
Zealanders to consider a
career in agriculture,
Federated Farmers
PresidentAndrew Hoggard
says.
The 2022 Federated
Farmers­Rabobank Farm
RemunerationReport
showssince the 2019/2020
survey weightedaverage
incomes in the dairy sector
have grown15% (to a‘total
package’ average valueof
$67,251).
They’reup14%, to an
average of $66,859, in the
sheepamd beef sector; and
up 7% in arable (to $68,618).
‘‘Oursurvey shows thaton
top of wagesadding in other
factorsthat make up the
totalvalueofremuneration
packages for farmstaff, such
as accommodation, meat,
firewood and KiwiSaver,
there’sseveralthousand
dollarsofextra valueto
workers acrossall the
sectors,’’ Andrewsays.
‘‘In towns and cities, big
chunks of workers’ income
are swallowed by
accommodation costs.
‘‘Butinour dairy sector
75% of employers provide
accommodation for staff
(61% sheep/beef; 41%
arable), withthe average
accommodation cost per
week being $157­$187.’’
The survey, carried out by
independent firm Research
First, is based on responses
from 729 employers/farm
sector businessesofall sizes,
coveringatotal of more than
2,200employees.
‘‘So as well as job security
in asectorthat has ploughed
aheadthrough tough COVID
timesasthe engineroom of
our economy, plusthe
satisfaction of working
outdoorsand growing
quality food for families
here and in scores of other
countries,the survey makes
clearthere are solid pay
packages available,’’
Andrew says.
‘‘Those who havethe right
attitude and show
leadershippotential can
find satisfying career
pathways.
‘‘Forexample, in the last
two years the total value of
the remunerationpackage
for adairy operations
manager has jumped25% to
an average$107,593 and a
sheep/beefstock manager is
earning an average 18
percent more in wages and
add­ons for atotalaverage of
$78,076.
‘‘Farm businesseshave
clearly moved to stay
competitive in atight labour
market, and to reward staff.
‘‘That has been even more
important with the
pandemic disrupting
availability of international
workers.’’
The Feds­Rabobank
survey alsoshowsthat
across the sector,average
reported hours workedfall
belowthe International
Labour Organisation
recommended maximum
standardworking time of 48
hoursper week (forfulltimers
­dairy47.2 hours,
sheep/beef 44.8,arable 46.2).
Rabobank New Zealand
chiefexecutive officer Todd
Charteris saidthe 2022
report is the thirteenth
report the bank has
developed in conjunction
with Federated Farmers
sincethe partnership began
in 2008.
‘‘In addition to data on
farm salaries and total
package values, the report
also provides information
related to on­farm positions
across the dairy, sheep, beef
and arable sectors,’’ he says.
Rabobank was proudto
partner with Federated
Farmers to producethis
report which both
employers and employees
can usetohelp guide
remuneration discussions.
Costs eat into profits
By TIM CRONSHAW
Fonterra has foreshadowed a$9.30 to
$9.90 payout for eachkilogram of milk
solidswith a$9.60 mid range.
That could yet go higher for the next
forecast in May before the final wrapup
—ifdairyfuturesmarkets are any
indication.
But the list is growing for increasing
costs —interestrates, wages,
fertiliser,agrichemicals,fuel, animal
health, contracting and overall
inflation.
The costproportion is now believed
to be north of $7.50 for each kilogram
of milksolids produced.
Federated Farmers North
Canterbury dairy chairman KarlDean
said this season’srecord forecast
wasn’tlike payoutincreasesofthe
past because costs were rising at the
same time,ratherthan following a
year later.
‘‘It wouldn’t surprise me if it was
$7.50 to $8/kg,’’he said.
‘‘The key is the profitmargin and
that is no more than and could be less
than ayearago whenthe payout was
$7.54/kg.
‘‘We’ve had a$2payout jump but I
doubt we’vehad a$2profitjump.’’
If the forecasted milk price was
adjustedfor inflation, the profit
marginprobablywouldn’t be as high
as 2013’s $8.40/kg.
The Leeston farmer saidfarm costs
had liftedmore than $1/kg andthat
could be expectedtoincrease further
on the backofthe Ukraine war.
He said many farmers didn’t have
the ability to lower their costsaswages
never wentdown and fuelprices don’t
seem to drop as muchasthe oil price.
‘‘All the costs havecreeped up
internationally and that’snot just New
Zealand.
Give and take ... Federated Farmers
North Canterbury dairy chairman Karl
Dean is worried rising costs are
consuming much of the record milk
price.
PHOTO: FEDERATED FARMERS
‘‘Fertiliser’shad ahuge jumpand
we haven’t heard thelastofthis as this
jump is related to Covid­19.
‘‘Thejump coming is related to the
war in Ukraine and that’saffecting
production worldwide.’’
He said it was a‘‘vicious circle’’ with
lowerproduction reinforcing
commodity prices and overseas
competitors would soonlobbyfor
subsidies to be lifted.
The dairy cull is still increasing in
the United States as more farmers
swingtobeef becauseofhigh feed
costsand production is also down
because of high inputs in Europe.
Mr Dean said the April 1increase
for the minimum wage had closed the
gap betweenthese workersand lowerrung
managers who would alsowant a
pay rise.
Apoor harvestwould sendgrain and
seed prices‘‘through the roof’’.
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