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The Historical Effect of Climate on Hawkes Bay Pastoral Land Prices

A factor to periodically affect pastoral land prices from time to time in the past has been the Hawkes Bay climate, in particular the potential for drought. With the exception of farmland close to the western mountain ranges and the other relatively few areas having summer moist micro climates, wide areas of the Hastings District and the Central Hawkes Bay District have a relatively (to much of New Zealand) summer dry climate which is dictated by New Zealand’s westerly weather pattern and the rainfall shadow east of the dominant North Island mountain divide that isolates Hawkes Bay. The average rainfall of between 750 and 850 mm is mostly spread between March and mid December, or autumn to early summer.

Hill country farmers in Hawkes Bay traditionally gear their farming operations around the possibility of a summer pasture growth deficit by being prepared, if necessary, to sell a proportion of their lambs or cattle as “store” stock i.e., sale for fattening on other properties, and by growing summer stock feed crops as part of a cycle of pasture renewal. The Hawkes Bay weather pattern is not considered an undue disadvantage by good farmers; who “farm to the climate” and enjoy mild winters and healthy livestock, benefiting from significantly lower levels of stock ailments and parasites which are more common in higher rainfall Districts.

Periodically however, more severe droughts occur. Severe summer droughts on their own are not likely to critically affect the viability of well managed farms, as was evidenced by a notable summer drought in 1998. Summer droughts followed by an autumn rainfall deficit (experienced in 2007) preventing adequate pasture renewal for winter are very much more serious for the farmer, often resulting in the necessity to sell capital breeding livestock in poor condition at low prices on a crowded livestock market. At the end of the drought period when pastures have recovered sufficiently, farmers then face the need to compete for the purchase of replacement breeding stock at inflated prices.

Extended summer to autumn droughts are fortunately uncommon, however were experienced over wide areas of Hawkes Bay in 1983, again in 1986 and most recently in 2007. The 1983 and 1986 droughts were considered a starting point, aggravated by low commodity prices, in significant and sustained falls in pastoral farm prices which were experienced through to 1997. In 2007, a normal mild summer drought was followed by an unprecedented, severe autumn drought, also at a time many farmers were struggling to cope with low lamb and wool prices. This has undoubtedly affecting pastoral farm real estate market in the present time.

Hawkes Bay has experienced nearly 20 years of generally favourable growing seasons, the extended nature of the 2007 summer – autumn drought was both a bad experience and wakeup call for a great many Hawkes Bay farmers. This was a season many younger farmers had not previously experienced and older farmers had forgottern about. Traditionally, prudent Hawkes Bay farmers include significant areas of summer feed crop within their annual pasture renewal program, as well as up to two years hay, bailage or silage made and stored. In good seasons this is used as suplimentary and fattening feed, but in times of shortage; to sustain capital livestock. The potential for drought in Hawkes Bay will always be present and no doubt, from time to time in the future, will again influence pastoral land prices.

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