What rising fuel costs mean for farmers and growers

We’re all feeling pain at the pump, but rising petrol and diesel prices are hitting the primary sector harder than most. From machinery and irrigation to transport, fuel sits at the heart of farming and growing operations. And it’s not just fuel: urea prices have climbed too.

These pressures are pushing up operating costs, so it’s worth taking a closer look at where things stand and what you can do next.

Starting from a position of strength

Much of New Zealand’s rural sector has entered this period on a relatively solid footing. Dairy prices have strengthened, beef is trending upward, lamb has been steady, and horticultural exports such as apples and kiwifruit are tracking well overall.

Fuel supply itself remains stable. We are currently in Phase 1 of the Government’s Fuel Response Plan, meaning fuel is arriving as expected and there are no restrictions in place.

The Government has also taken steps to strengthen supply resilience, working with Z Energy to secure an additional 90 million litres of diesel, expected to arrive in June or July, as a buffer against potential supply disruptions.

Supply isn’t currently an issue, but price volatility is

You can’t control global fuel prices, but you can stay on top of how it’s used on your farm or orchard:

·         Maintain machinery. Check tyre pressure, wheel alignment, and keep up with regular servicing.

·         Check trailer tyres too. They’re easy to overlook, but worn tyres can seriously bump up your fuel use.

·         Cut idling time. Idling uses more fuel than you’d expect, so switch off if you’re stopped for more than a few minutes.

·         Slow down. Even small reductions in speed can make a big difference over time.

·         Choose tyres carefully. Low rolling resistance tyres can help you get more out of every litre.

If rising costs are starting to sting, it may be a good time to revisit budgets and cash flow forecasting with your accountant. And if you have any upcoming expansion plans, we can help you weigh the benefits against the need to protect your buffer.