A taxing time...for our Farmers
A taxing time...for our Farmers
Let's start with the good news, this looks like a very profitable year for many farmers and while the dry conditions and increasing costs may reduce the profit, the amount of tax that you will pay should be reviewed and worked through with your accountant. We would encourage you to ask the team to complete a tax review for you, it can save you money by accurately assessing what needs to be paid based on your projected profitability.
While many think that the farming community is performing well and commodity prices are high, the dry conditions are causing some real challenges for our Southland farming clients at the moment:
How much rain have we had in the last 90 days vs the same period last year. Refer to table.
The notable difference being Coastal Southland, normally the coastal area receives regular rainfall but this year is certainly struggling
and this is putting pressure on many of our farmers, so what is the impact?
- Increase volumes of stock that are being sold as store
- Milk production is dropping
- Trying to get rid of stock when everyone else is doing the same creates a space issue at the works
- COVID – It’s here and its impacting on capacity at the freezing works, delaying processing
- Increased costs to feed stock with imported feed. i.e. PKE, Grain, Silage/Baleage, all lifting in price
- Winter feed – It is likely that Crop yields will be less than expected
So what can farmers do? Continue to plan, talk with other farmers, farm consultants and review your options.
At Malloch McClean, we can help update your cashflow forecast and prepare a budget for the next season to give you and your bank a degree of
comfort. We also understand the complex factors that may affect your agribusiness and have solutions to help you build a smarter, better
farming business. Need help? Get in touch.