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Get Real - Arable Industry Reality Check

GET REAL - ARABLE INDUSTRY REALITY CHECK

"Ask any arable farmer about the boom down on the farm, and he will tell you
to 'get real', according to Neil Barton, Chair of Federated Farmers Grains
Council. "Arable farmers have not shared in the recent lift in income
attributed to pastoral farmers."

Much of the media comment reflects the good growing season for pastoral
farmers.

"For arable farmers, the boom simply has not happened. Arable returns have
not increased, and grains farmers have had another tough harvest. Prices
remain low, and costs are increasing due to the weak New Zealand dollar."

"The negative effect of these problems on farm returns was compounded by
unfavorable weather during harvesting. Any comments about a better year has
been related to better cereal yields following the two previous dry years,"
said Mr Barton.

"Loose talk of increased farm profitability must not lead to any expectation
of cost increases. Arable farmers are not in any position to absorb
increased costs."

The prospects for the 2000 harvest do not look any better. Contracts for
milling wheat so far have offered only minor increments. Feed wheat and
barley contracts are offering similar prices to last year. Herbage seed
contracts have reduced in volume and price.

"Our concern is that the weak New Zealand dollar has already increased the
costs of production."

"More cost increases are yet to come. Fuel prices, one of the largest costs
for arable farmers, have risen another three cents over the last week," he
noted.

"Real farm profits have been trending downwards over the last three decades.
Although last year's farm returns were higher, the returns are still only
54% of the average farm profit in the 1970's when measured in real terms."

ENDS
For further information: Neil Barton 021-441-125
Kevin Geddes 03-307-8148

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