El Nino

19 September 1997

Article for the NZ Farmer by Chris Ward, Senior Policy Analyst with MAF Policy

There is little debate that we are in an El Nino weather phase. Whilst the actual Southern Oscillation Index is of varying negative intensity from month to month the sea temperature off the Coast of Peru is running at 5 degrees centigrade higher and it is this phenomenon which has the influence on the weather.

Debate will continue on the likely agricultural impact of El Nino. Will it be similar in severity in terms of lack of rain and warm hot winds to the 82/83 El Nino drought on the East Coast of both Islands. In looking at past El Ninos the more negative the index is not a predictor of a worse affect on agriculture. For instance the 1986/87 El Nino had more of an influence on dairying in the Waikato and Taranaki than the more negative indexed 1982/83 affect. Dairy production was estimated to be 10% down in these regions in 1986/87 but only 3% down in 1982/83.

The best potential parallel for likely impacts this time is perhaps the 1982/83 El Nino impact.

The differences this time are:

  • Stocking rates for sheep and beef are lower than 1982/83( At least 1 SU/Hect.) and ewe liveweights especially are higher than in 1982/83 thus providing a bigger buffer.
  • Stock with some exceptions (Marlborough) are in good condition after a relatively mild winter.
  • There has been plenty of warning, and farmers have more experience and are better prepared than the were in past El Nino’s.
  • Dairying in most regions is off to a great start due to excellent cow condition following a mild winter.
  • Supplementary feedstuffs are generally in good supply and farmers in Canterbury feel that there will be available feedgrains at reasonable prices.
  • Grazing off farm in some regions will be restricted by TB movement control. Grazing availability we estimate is less with recent forest plantings.

We estimate that the potential detrimental impacts of droughts on the East Coast and possible Northland regions are unlikely to be fully compensated by positive affects due to increased rainfall on the West Coast.

We have also assumed that product prices will not change in the event of reduced supply. This we think is reasonable for some preliminary ballpark figures, but we would hope and trust that exporters would make the most of any perceived supply shortages amongst importers.

Not as much transporting of stock to areas which have feed occurs as might be expected. Farmers in areas with feed usually prefer to purchase store stock to finish themselves, finances permitting.

In arriving at a cost at the farm gate we looked at the estimates of regional costsfrom past drought periods (which incidently weren’t all El Nino related). For instance in 1990 the effects of the East Coast drought and its flow on affects 1988/89 and 1990 were estimated at $365 million (farm gate costs)

We have looked at past product production statistics and categorised these as to the weather pattern at the time and taken on board the differences as outlined above.

Estimate of Farm Gate Loses potentially attributable to El Nino:
(Spread over this and next financial year)
   
Lower national lamb slaughter weights: Down 1kg for 16,000,000 lambs @ $2.50/kg (East Coast Lambs) $40M
Lighter ewes to the works 3,500,000 ewes @$5 less $17M
Lower Cattle Slaughter weights Down 15kgs for 1,300,000 kill @$2.12/kg $41M
Lower Wool Weights 25,000,000 Sheep with 0.7 kgs less @3.00/kg $52M
Extra stock cartage and feed costs $9M
Dairying A reduction of 40,000 tonnes of milk solids on the earlier prediction of 930,000 tonnes production for 1997/98 @ 3.35/kg $134M
Grain Barley, Wheat and to a less extent Maize yield reductions $25M
Apples, Kiwifruit and other Horticulture $10M
Flow on impacts next financial year:
Fewer lambs with lighter ewe weights 4% drop in lambing % nationwide 1,440,000 lambs @$35 $50M
Other future impacts with a more extreme influence could include lighter replacement 2 tooths and heifers and in a real extreme slaughter of capital stock and expensive replacement costs in latter years.
Total $378M

Just as predicting the weather is an inexact science so to is predicting the impact. From the above estimate we derived our range of $300 to $500 million. To put this is perspective it is approximately 3 to 5% of total farm gate returns which in turn make up 5% of GDP.

At FOB prices Agriculture however forms about 15% of GDP. We have not attempted yet to estimate the impact to downstream industries.

  

 

Last Updated: 09 September 2010

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