Squeezed out

A SHORTAGE of ready cash or suitable short-term finance has been blamed for diminishing crowds at major store sheep sales during October.
Nanjing Night Net

Pastoral house agents and their financed buying clients in particular have noticeably gone missing leaving major feature sales crucially short on buyer depth.

Anecdotal evidence would suggest the north and north-west cropping districts are the worst hit by this apparent lack of financial support.

However with a delayed start to the southern lamb turn-off expected due to sodden winter and less than ideal finishing conditions, a diminished turn-out of southern buyers has also been conspicuous.

The anticipated return to buying to restock irrigation areas that water allocations have been reinstated has also been thwarted by the sheer cost involved with restocking, which amounts to about $25,000 to $30,000 per deck for breeding ewes.

Rural traders across the mixed farming regions also say that farmers specialising solely in grain-growing have literally locked away cheque books for the time being, delaying account payments until at least some income is generated from the upcoming grain harvest.

Only those they say that have continued their mixed sheep and cropping enterprises are paying their bills, which is leaving some small town rural merchandisers with unpaid accounts while this apparent lack of cash flow prevails.

Sources within the major pastoral houses also confirm lending for livestock has virtual ceased.

And those luckily enough to even gain a sympathetic listening ear, the personal asset guarantees that are being required by lenders is said to be enough to frighten most applicants away, if not the 16.75 per cent being charged will.

Pastoral house lending was once an integral first stop for farmers wanting finance for livestock purchases.

Not only did in it provide farmers with an alterative source of carry-on finance away from the major lending institutions (the banks) but it also acted to generate new potential business for the lending agency a burden the cashed-up private agency industry now appears more willing and more able to carry.

While much of this evidence is circumstantial, it does not belie the fact that much of the rural industry is still doing it extremely tough in this country’s two-speed economy.

A string of poor seasons caused by drought, limited returns the spiraling cost of livestock and increased interest rates over the past three years has found most farm businesses short on liquidity.

And huge causalities are being rumoured to emerge after this harvest is in the bank.

As one senior Victorian stock agent explained, last year was supposedly the season that many farmers were meant to get back on top.

But all they got was a wet summer, floods, flystrike, locusts and then mice to ruin what was potentially a record harvest.

So for the sake of the greater rural community and the livestock industry in particular, this is a grain harvest that needs to come home. And it needs to be hassle-free.

This story Administrator ready to work first appeared on Nanjing Night Net.

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