Economy on the rise

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Economy on the rise

Long term focus: Mark Chapman and Kingsley Stewart of Chapman Machinery Service discuss the impacts of low dairy prices.

By Brad Lester
BUSINESSES servicing dairy farmers expect trade to remain slow for some time to come, as milk prices recover.
But while dairying is a major driver of South Gippsland’s economy, the diversity of other farming, industry and services in the region has helped businesses generally continue steadily.
That was reflected by most Leongatha businesses experiencing strong sales recently, especially over Christmas, said Leongatha Chamber of Commerce and Industry president, Darryl McGannon.
The dealer principal of Edney’s Leongatha Pty Ltd vehicle dealership has seen more interest from farmers in new and used motor vehicles.
“The general feeling among local businesses is still confident and that our region will continue to grow,” he said.
“From a business view we are very fortunate that the South Gippsland area is generally stable and we do not have the highs and lows of other regions. Our local area is now much more
diverse.
“With milk prices on the rise, I would expect our economy to continue to improve as farmers will have the confidence to spend. Farmers certainly play an important role in our local economy and businesses. I would expect we will see a flow on from increasing milk prices.”
Mark Chapman of Chapman Machinery Service in Leongatha said few “big ticket items” such as tractors are selling, as farmers watch their budget.
“Dairy farmers have been pretty resourceful in the way they have reigned in their costs over this period and have made only absolutely necessary purchases, which is having an effect on what we do,” he said.
“But things are improving. They have not bought a lot of things like tractors, but implement sales have still been good and sales improved over the hay season.
“Our turnover has not been as high as last year but as milk prices improve, we expect that things will improve.”
Mr Chapman anticipates sales of feeding equipment in coming months but is not optimistic about moving large volumes.
“We won’t see most sales until the autumn break. Things will be pretty conservative until milk prices pick up again,” he said.
“But it’s not as bad as it could have been. Most properties are reliant on equipment because they’re automated and machinery eventually wears out, so some time farmers need to renew.”
Repair work has remained steady, although not as busy as this time last year.
“Quite a number of people that we would service for are servicing their own gear. People are really trying to rein their costs in so they do not put themselves under more pressure than what they have been under,” Mr Chapman said.
“I admire the farmers for keeping their businesses viable. They really have worked their way through it. We have got good farmers in this area and our accounts are no worse than they have been.
“It would have been pretty easy for them to book stuff up and then suddenly realise they have not got the cash flow to pay for it.”
Custom from dairy farmers has clearly slowed at Leongatha rural supplies store, AGMART. But manager Sally Hulls said fortunately business from other agricultural sectors has remained consistent.
“Dairy farmers usually buy a whole range of things but at the minute, they are sticking to the essentials. They are just not fixing fencing and just buying feed and drenches. With things they do not need, they are holding off on for a while,” she said.

Short URL: http://www.thestar.com.au/?p=21

Posted by SiteAdmin on Feb 2 2010. Filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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