Dairy sector caution on spending

By Alexia Johnston

A potential drought, the election and a minimal increase to the dairy payout are among the suspected reasons people are still hesitant to spend. Photo / Sally Brooker
A potential drought, the election and a minimal increase to the dairy payout are among the suspected reasons people are still hesitant to spend. Photo / Sally Brooker

Rural sector businesses are yet to see any major spending increases, but there are some positive signs.

Industry retailers and contractors who talked to Central Rural Life last week were singing the same tune - spending was down as farmers remained cautious about the immediate future.

A potential drought, the election and a minimal increase to the dairy payout were among the suspected reasons people were still hesitant to spend.

ATR Refrigeration managing director Andy Turner was among those who had noticed a lack of spending, particularly across the dairy sector.

However, other farmers were still spending, particularly deer farmers.

''But, dairy is down. They are very, very much looking at how much they are spending around the place,'' he said.

''The sheep and beef guys, to be fair, they are pretty static and deer is going great guns.

''We're still getting plenty of work with the new [milk] cooling regulations, but they [dairy farmers] are definitely very cautious. They are just not sure how things are going to go over the next year or so.

''The rural sector always just ticks away - it has its ups and downs.''

Paul Wilkins, of Paul Wilkins Tractors, was experiencing a similar trend.

''We haven't noticed any pick-up,'' he said.

''It's been quite steady all year, really, but it's cautious spending. People are just buying what they absolutely have to.''

A South Canterbury contractor, who wished to remain anonymous, said farm-related work for his sector was starting to improve, slowly.

''We've been struggling to get farming work for a while, but it was starting to pick up with the [dairy] payout adjustment,'' he said.

''So, this might allow them to be a little bit more relaxed.

''It's definitely improved.

''I have noticed since the weather got hot and dry and everybody in the industry started to talk about a drought the work started to dry up again,'' he said, on Tuesday last week.

However, by the following day, any immediate threat of drought was temporarily washed away in some areas, particularly South Canterbury where about 32mm of rain fell.

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- Otago Daily Times

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