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Published: 2010-05-31 00:00:00

Despite recent rain, the Waikato officially remains a drought zone and there is ongoing concern for cash-strapped farming families, says the Waikato Regional Drought Committee

The committee, comprising government, regional council, banking and farming industry representatives, met in Hamilton last week to review the drought situation and map out the next steps of the regionally coordinated response to help farming communities weather the short and long term effects of the drought.

"Even though farming communities are feeling more optimistic, the average dairy farmer will be struggling financially on the back of three dry years," said committee chairman Peter Buckley, the chair of regional council Environment Waikato.

Reduced milk income and increased feed and pasture renewal costs have hit farmers hard and it is expected they will need two or more good years to recover financially, he said.

Over the past month, rainfall has generally ranged from 100-200 millimetres in farming areas around the region. While this is about average rainfall for May, there had been no significant rainfall since December in many parts of Waikato. As a result, soil moisture conditions are still below average and more rain is needed to fully restore pasture health.

DairyNZ’s representative Duncan Smeaton said, despite the rain, the situation was still serious for many farmers, with pasture covers lower than usual and with some cows in poorer condition than many farmers would like in the lead up to calving.

"The three dry summers in a row, compounded by black beetle damage on pastures, has left the average Waikato dairy farmer out of pocket by $100,000-$150,000 a year. That’s $300-$400 a cow or $1 - $1.50 /kg of milk solids."

The Rural Support Trust chairman Neil Bateup said farmers were still reeling from the financial effects of the 2008 drought, and this was compounded by dry weather last year and this year.

"We are concerned there are farming families who might qualify for assistance who simply haven’t come forward."

So far 25 Waikato families have qualified for assistance, which includes food grants and child care subsidies.

"It’s tough out there for an awful lot of farmers and we encourage them to just pick up the phone to discuss the things they can do to help them get through the drought."

He encouraged farmers to work with their banks and financial advisors.

Representatives from ANZ and National Bank, BNZ and Rabobank attended the committee meeting.

Finance sub-committee chairman Stuart Ewing, representing the ANZ and National Bank said farmers should now revise their budgets based on Fonterra's updated forecast for the 2010 / 11 season ranging from $6.90 to $7.10. 

"The improved dairy outlook for next season will reduce the impact on many farmers because improved cash flow will help them repay additional borrowing due to the increased farm costs associated with this year's drought," he said. 

"Farmers are encouraged to contact their banks early if they remain concerned and get advice on how their situations can best be managed on a case by case basis".

The North Island manager for policy at the Ministry of Agriculture and Forestry, Phil Journeaux, said assistance under the Government’s drought declaration for the region would be available until the end of September.

"The funding for the Waikato Rural Support Trust will continue and welfare support is also available for qualifying farmers. MAF will be reassessing the situation in August," Mr Journeaux said.

The Waikato Regional Drought Committee, will continue to meet monthly until September at which time it too will reassess whether there is any ongoing need for the regionally coordinated drought response.

Waikato farmers can contact the Rural Support Trust on 0800 787 254. Drought-related information is also available from DairyNZ's website

Dairy NZ's Extreme Weather Update  for June is now available.