Farmer spending barometer: set fair or stormy weather ahead?

June 13, 2011

Farmer spending barometer: set fair or stormy weather ahead?

On the eve of the 2011 National Agricultural Fieldays, the country is holding its collective breath to see what spending signals the nation’s farmers will be giving.

“Fieldays is the barometer of farmer spending,” says Dr Stuart Locke, Director of the Institute for Business Research at the University of Waikato. “And this year the stakes are higher than usual.”

Unlike the rest of the economy, the agricultural sector is booming, he says. Payouts to dairy farmers are up, and all agricultural commodities are currently experiencing excellent returns.

“So the million dollar question is: Will farmers be opening their wallets at Fieldays, or will they be squirreling away cash to pay off mortgages and other debt?”

The annual survey of Fieldays spending should provide some answers.

The economic impact survey, conducted in conjunction with the University of Waikato, tracks purchases and orders taken by exhibitors, and also monitors general sentiment.

“Townies” purchases of consumer products through Fieldays also show up.

In previous years, the wider economic benefits which flow from farmer purchases have proved a great boost to the Waikato and national economies.

With a record number of exhibitors this year, Dr Locke says there’s confidence among suppliers.

“Now we just need to wait for the survey results, to see what the vote is. Will it be (1) give the money to the foreign-owned bank, (2) spend the money on foreign-produced equipment, or (3) buy the farm next door?”

Dr Locke says he’s picking some increase in equipment purchases this year as well as a steady continuation of debt payoff, while buying the farm next door will lift off in February next year.

“If the trifecta comes in we will have something to really smile about,” he says.

The survey results will be released publicly the week after Fieldays.

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