January 12, 2026 • 9 mins
Graham Butcher looks at what positive returns should mean for farmers regarding cashflow.
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Episode Transcript
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Speaker 1 (00:10):
Welcome back. This is the muster on Hakanui as I
enjoyed in studio by Graham Butcher. Happy New Years. If
we still say that, great.
Speaker 2 (00:19):
I still can probably saying that for another months. Yet
it's the same for you and same to all the listeners.
Speaker 1 (00:23):
It's just one of the most awkward things to try
and decipher. But anyway, there's plenty of other things to
worry about rather than greetings. Graham. Look, it's an interesting
start to the new year, and I think, to be honest,
it's a positive start to the new year from a
farming perspective regating pricing.
Speaker 2 (00:37):
Well, it certainly is. I mean, the schedules are maintaining themselves,
if not improving. I fully expected a bit of a
dip when lambs come on stream and the new year
normally would happen, but it hasn't, and that's a really
good sign.
Speaker 1 (00:50):
I remember back at the field days at Mystery Creek
in June and f Co are putting out foward contracts
for the spring for ten dollars fifty and everybody were
going it was going, Holy heck, it's big money. But
you fast forward six seven months and it wasn't a
pipe dream. It's crazy, but it's good.
Speaker 2 (01:06):
Ten fifty is pretty average. Actually, yeah, get a few
premiums on top of that. You knocking on ten seventy
ten eighty. Really good to see. And from that point
of view, I dragged out the beef and Lamb survey thing.
I got ten years worth of records here. If we
look at gross farm income lest all our working expenses
(01:27):
for the last ten years, two or four years ago
and three years ago, that's a twenty two to twenty three,
twenty three, twenty four years. The surface we had per
stock unit on Class six farms in south and was
forty seven and forty five dollars the stock unit. Two
very difficult years, the worst years we've had for quite
(01:48):
some time. The last two years twenty four to twenty
five and twenty five twenty six, which is still an
estimate from beef and lamb. Twenty four to twenty five,
we're fifty five percent up in our net returns per
stock unit, and this current year twenty five twenty six
still estimates sixty eight percent up on beef and lamb
(02:08):
on Class sex, and that is actually a conservative because
they're using one hundred and fifty two dollars for lambs
and ask.
Speaker 1 (02:14):
Your conservative figure for a lamb?
Speaker 2 (02:16):
Did I say that, well, it is for a finished
lam it is. Anyway, they're using what are we two
thirty three for wall which is also very conservative. It's
quite a bit over three dollars net return. Have you
been following the PGG w allsale report?
Speaker 1 (02:33):
Still going up?
Speaker 2 (02:33):
It's still going up, which is really good to see.
And they're using just under sixteen hundred dollars for finished cattle,
so quite conservative. So we're in a pretty remarkable position.
This is a record year and it looks as though,
hopefully for everything cross that the Shugers are going to
maintain well.
Speaker 1 (02:52):
Twenty two to twenty three on farm inflation was ridiculous,
so in the twenty percent bracket plus well, Jude, you
couldn't get anything.
Speaker 2 (03:00):
Well, no fuels higher than that. Fuels I think twenty
four percent from memory and fertilizer went through the roof
and that just knocks the bottom line to pieces. So
you know, the last four years have been pretty remarkable.
Two of the worst years and two of the best
years we've had, which just shows you it's pretty volatile
out there and thinking ahead, what's going to happen in
(03:21):
the next few years.
Speaker 1 (03:23):
Is a critical mass regarding lamb or red meat in general,
though that is keeping these figures up.
Speaker 2 (03:30):
It will certainly have something to do with it. But
when you look at the massive changes and the net
returns or sharedule values we've had over the last four years,
I mean, do people's appetite to pay for red meat?
Is it that volatile? Well, I mean what's driving this
supply and demand is part of the picture.
Speaker 1 (03:49):
Maybe New Zealand Produce has looked at as one of
the good guys. Perhaps I don't know.
Speaker 2 (03:53):
I think it always has been.
Speaker 1 (03:54):
Yeah, well that works in our favor, and we need
to sell the story a bit more, which makes the
one hundred percent news New Zealand.
Speaker 2 (04:00):
You're in New Zealand, brandes ge three excellent.
Speaker 1 (04:05):
That's the subject for another day. That's something that isn't
going away as well. So you're reasonably optimistic regarding the
next Okay, we always do it now and you're always
looking forward to the next season. Yes, this he has
been a boomer. But are you pretty positive? Posimistic? Positive?
That's a great word, isn't it. You're pretty you're buoyant
towards next season already or is it too really to say.
Speaker 2 (04:28):
I'm reasonably born for the next season and lists to
commentate us the next couple of years, she'll be pretty good,
but who knows what's going to happen after that? Raises
the question cash flows. Budgets as good as they've been
for a while, a little bit of cash in the
system just begs the questions what do we do from
here on out? Looking ahead? So I sat down here
(04:48):
to think about that, and two things popped into my
head immediately. We can either well, the two approaches you
can have. You can neither repay debt andsulate your farm
from interest COSP and interest rates are lower now may
not be the best option. Looking at productivity issues on
the farmer is probably a good option. Every farm is
going to be totally different, different set of circumstances, and
(05:09):
the best road ahead is going to be completely different,
even for neighboring farms from a productivity point of view.
The two things that struck me was fertilizer management and
internal parasites are sheep and cattle. I mean, it's there
are two absolutely critical issues. I mean, every farmer if
they don't know what their drench resistance issue is on
(05:32):
their farm and they need to find out this year.
A bit of a cost involved. Initially, it's quite cheap
to find out if there is a resistance problem. It's
just a feacally egg count ten days after your next
strench that should be should happen every farm if there's
an issue there, the costs start to kick in, but
(05:52):
the advantages are getting on top of that issue are
absolutely huge. There's a whole there's a whole raft of
things we have to do to manage parasites properly. You
can't simply do it with a drench gun. The real
issue is the parasite L three intake over the tongue
that drops to growth rate. And there's some really good
(06:12):
graphs in the Wormwise booklet they showed quite conclusively that
it's the parasite's L three intake that has the biggest
impact on the growth rate of animals.
Speaker 1 (06:26):
So when you're speaking to clients and the likes of
just farmers and genuine because I'm noticing it when I'm
speaking to them just regarding drench resistance and everybody's you know,
it's pragmatic about the situation, understanding they need to change
your thinking. A lot of people are.
Speaker 2 (06:41):
Yeah, I mean you can have drench resistance and the
sheep may not necessary so show any signs of it.
And that was that was shown quite conclusively back in
nineteen eighty two. Prof Coop did the work and that's
there's a graph and the worm wise thing which everyone
should sit and think about really hard. They had four
(07:02):
groups of animals they pen fed them. They had pen
fed one group of animals with no L three lava.
They had another group feed one thousand L three lava
a day, another group that was fed five thousand effective
lava a day, and another group that were fed five
thousand lava a day and were drenched regularly. And it's
(07:27):
the ones that were fed five thousand lava a day
over the growth period they did eighty one grams a day,
which is pretty minimal. That's next to nothing. The ones
that were fed five thousand lava a day and drenched
regularly only did one hundred and two, not a big difference.
Those animals that were drinks showed no sign of parasitism,
(07:49):
There was no parasites in them that were slaughtered, but
they still only had a minimal gain from those animals
that were not drinks. It just conclusively showed that its
effective lava the immune response over the tongue that causes
the issue. The animals that were fed one thousand a day,
which is very low intake, they did one hundred and
thirty eight grams a day and the controls that were
(08:09):
fed no lava at one hundred and fifty three. So
not you know, there's a difference there, but it's not
a big difference. So it's that lava over the soroap
that counts. And there's a whole lot of issues that
come into farm management when you're trying to manage the
l three lava on your pasture and cattle. Proportion of
cattle increase on farms is to me is a critical issue.
(08:30):
And when you look at the profitability of sheep and
cattle are pretty close at the moment.
Speaker 1 (08:35):
Interessing times, Graham, you go and have a pessigienistic after.
Speaker 2 (08:38):
That, I shall absolutely a look.
Speaker 1 (08:41):
That actually means neutral, not that there's such a word,
but anyway, will leave that bigger on you, Graham. But
your farm consultant learning new brands of English every day
here on the muster, not there are what else the
sut and down stock food. We have a chinwad next
Welcome back. This is the muster on Hakanui as I
enjoyed in studio by Graham Butcher. Happy New Years. If
we still say that, great.
Speaker 2 (00:19):
I still can probably saying that for another months. Yet
it's the same for you and same to all the listeners.
Speaker 1 (00:23):
It's just one of the most awkward things to try
and decipher. But anyway, there's plenty of other things to
worry about rather than greetings. Graham. Look, it's an interesting
start to the new year, and I think, to be honest,
it's a positive start to the new year from a
farming perspective regating pricing.
Speaker 2 (00:37):
Well, it certainly is. I mean, the schedules are maintaining themselves,
if not improving. I fully expected a bit of a
dip when lambs come on stream and the new year
normally would happen, but it hasn't, and that's a really
good sign.
Speaker 1 (00:50):
I remember back at the field days at Mystery Creek
in June and f Co are putting out foward contracts
for the spring for ten dollars fifty and everybody were
going it was going, Holy heck, it's big money. But
you fast forward six seven months and it wasn't a
pipe dream. It's crazy, but it's good.
Speaker 2 (01:06):
Ten fifty is pretty average. Actually, yeah, get a few
premiums on top of that. You knocking on ten seventy
ten eighty. Really good to see. And from that point
of view, I dragged out the beef and Lamb survey thing.
I got ten years worth of records here. If we
look at gross farm income lest all our working expenses
(01:27):
for the last ten years, two or four years ago
and three years ago, that's a twenty two to twenty three,
twenty three, twenty four years. The surface we had per
stock unit on Class six farms in south and was
forty seven and forty five dollars the stock unit. Two
very difficult years, the worst years we've had for quite
(01:48):
some time. The last two years twenty four to twenty
five and twenty five twenty six, which is still an
estimate from beef and lamb. Twenty four to twenty five,
we're fifty five percent up in our net returns per
stock unit, and this current year twenty five twenty six
still estimates sixty eight percent up on beef and lamb
(02:08):
on Class sex, and that is actually a conservative because
they're using one hundred and fifty two dollars for lambs
and ask.
Speaker 1 (02:14):
Your conservative figure for a lamb?
Speaker 2 (02:16):
Did I say that, well, it is for a finished
lam it is. Anyway, they're using what are we two
thirty three for wall which is also very conservative. It's
quite a bit over three dollars net return. Have you
been following the PGG w allsale report?
Speaker 1 (02:33):
Still going up?
Speaker 2 (02:33):
It's still going up, which is really good to see.
And they're using just under sixteen hundred dollars for finished cattle,
so quite conservative. So we're in a pretty remarkable position.
This is a record year and it looks as though,
hopefully for everything cross that the Shugers are going to
maintain well.
Speaker 1 (02:52):
Twenty two to twenty three on farm inflation was ridiculous,
so in the twenty percent bracket plus well, Jude, you
couldn't get anything.
Speaker 2 (03:00):
Well, no fuels higher than that. Fuels I think twenty
four percent from memory and fertilizer went through the roof
and that just knocks the bottom line to pieces. So
you know, the last four years have been pretty remarkable.
Two of the worst years and two of the best
years we've had, which just shows you it's pretty volatile
out there and thinking ahead, what's going to happen in
(03:21):
the next few years.
Speaker 1 (03:23):
Is a critical mass regarding lamb or red meat in general,
though that is keeping these figures up.
Speaker 2 (03:30):
It will certainly have something to do with it. But
when you look at the massive changes and the net
returns or sharedule values we've had over the last four years,
I mean, do people's appetite to pay for red meat?
Is it that volatile? Well, I mean what's driving this
supply and demand is part of the picture.
Speaker 1 (03:49):
Maybe New Zealand Produce has looked at as one of
the good guys. Perhaps I don't know.
Speaker 2 (03:53):
I think it always has been.
Speaker 1 (03:54):
Yeah, well that works in our favor, and we need
to sell the story a bit more, which makes the
one hundred percent news New Zealand.
Speaker 2 (04:00):
You're in New Zealand, brandes ge three excellent.
Speaker 1 (04:05):
That's the subject for another day. That's something that isn't
going away as well. So you're reasonably optimistic regarding the
next Okay, we always do it now and you're always
looking forward to the next season. Yes, this he has
been a boomer. But are you pretty positive? Posimistic? Positive?
That's a great word, isn't it. You're pretty you're buoyant
towards next season already or is it too really to say.
Speaker 2 (04:28):
I'm reasonably born for the next season and lists to
commentate us the next couple of years, she'll be pretty good,
but who knows what's going to happen after that? Raises
the question cash flows. Budgets as good as they've been
for a while, a little bit of cash in the
system just begs the questions what do we do from
here on out? Looking ahead? So I sat down here
(04:48):
to think about that, and two things popped into my
head immediately. We can either well, the two approaches you
can have. You can neither repay debt andsulate your farm
from interest COSP and interest rates are lower now may
not be the best option. Looking at productivity issues on
the farmer is probably a good option. Every farm is
going to be totally different, different set of circumstances, and
(05:09):
the best road ahead is going to be completely different,
even for neighboring farms from a productivity point of view.
The two things that struck me was fertilizer management and
internal parasites are sheep and cattle. I mean, it's there
are two absolutely critical issues. I mean, every farmer if
they don't know what their drench resistance issue is on
(05:32):
their farm and they need to find out this year.
A bit of a cost involved. Initially, it's quite cheap
to find out if there is a resistance problem. It's
just a feacally egg count ten days after your next
strench that should be should happen every farm if there's
an issue there, the costs start to kick in, but
(05:52):
the advantages are getting on top of that issue are
absolutely huge. There's a whole there's a whole raft of
things we have to do to manage parasites properly. You
can't simply do it with a drench gun. The real
issue is the parasite L three intake over the tongue
that drops to growth rate. And there's some really good
(06:12):
graphs in the Wormwise booklet they showed quite conclusively that
it's the parasite's L three intake that has the biggest
impact on the growth rate of animals.
Speaker 1 (06:26):
So when you're speaking to clients and the likes of
just farmers and genuine because I'm noticing it when I'm
speaking to them just regarding drench resistance and everybody's you know,
it's pragmatic about the situation, understanding they need to change
your thinking. A lot of people are.
Speaker 2 (06:41):
Yeah, I mean you can have drench resistance and the
sheep may not necessary so show any signs of it.
And that was that was shown quite conclusively back in
nineteen eighty two. Prof Coop did the work and that's
there's a graph and the worm wise thing which everyone
should sit and think about really hard. They had four
(07:02):
groups of animals they pen fed them. They had pen
fed one group of animals with no L three lava.
They had another group feed one thousand L three lava
a day, another group that was fed five thousand effective
lava a day, and another group that were fed five
thousand lava a day and were drenched regularly. And it's
(07:27):
the ones that were fed five thousand lava a day
over the growth period they did eighty one grams a day,
which is pretty minimal. That's next to nothing. The ones
that were fed five thousand lava a day and drenched
regularly only did one hundred and two, not a big difference.
Those animals that were drinks showed no sign of parasitism,
(07:49):
There was no parasites in them that were slaughtered, but
they still only had a minimal gain from those animals
that were not drinks. It just conclusively showed that its
effective lava the immune response over the tongue that causes
the issue. The animals that were fed one thousand a day,
which is very low intake, they did one hundred and
thirty eight grams a day and the controls that were
(08:09):
fed no lava at one hundred and fifty three. So
not you know, there's a difference there, but it's not
a big difference. So it's that lava over the soroap
that counts. And there's a whole lot of issues that
come into farm management when you're trying to manage the
l three lava on your pasture and cattle. Proportion of
cattle increase on farms is to me is a critical issue.
(08:30):
And when you look at the profitability of sheep and
cattle are pretty close at the moment.
Speaker 1 (08:35):
Interessing times, Graham, you go and have a pessigienistic after.
Speaker 2 (08:38):
That, I shall absolutely a look.
Speaker 1 (08:41):
That actually means neutral, not that there's such a word,
but anyway, will leave that bigger on you, Graham. But
your farm consultant learning new brands of English every day
here on the muster, not there are what else the
sut and down stock food. We have a chinwad next
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