Economic Outlook Project
Macro Economic Report - Infometrics
Tararua is an agricultural-based economy populated by small towns that act as service centres to local farmers, other businesses, and residents. The year-to-year profitability of the farming sector has a broader effect through the whole local economy. To greater understand the effect Cyclone Gabrielle had on our economy the Recovery Team engaged Brad Olsen at Infometrics to undertake a Macro Data report focusing on the state of the Tararua Economy as of October 2024.
The report gave valuable insight into the Tararua District Economy and the compounding impacts of not only a cyclone but also high input costs, lower commodity prices, and intense debt servicing pressures. It provided context to what we were hearing out in the community.
Key Findings:
- 40% drop in farm sales from 2022
- 3.8%pa fall in annual sheep meat graded
- Farm costs have stabilised however still 25% more expensive then 2020
- Fuel, Interest rates and fertilsier largest increase in costs for primary sector
- A 7% increase in non-performing and potenially stressed loans across agriculture (exc dairy).
You can read the full report here
Micro Economic Report - MCI+A
During the Recovery period, Tararua’s farming community faced an extraordinary convergence of pressures;not only Cyclone Gabrielle, but also prolonged drought during late 2023/2024, soaring interest rates, and record-low commodity prices. To effectively advocate for support, it was essential to capture local, farm-level economic data.
While national analysis (such as work by Brad Olsen_provided some insights, it lacked the local specificity required. The Tararua Recovery Team therefore partnered with MCI & Associates, a large rural accountancy firm with strong connections across the district. Together, a targeted survey was developed and used during end-of-financial-year meetings with cyclone-affected clients - gathering real-time, reliable insights directly from Tararua farmers.
Key Learnings from the Economic Impact Survey
This localised study analysed data from 58 farms, covering around 46,536 effective hectares. It painted a clear picture of the financial toll Cyclone Gabrielle had on our farming sector in the Tararua District.
Key Findings:
- Gross farm revenue declined from $949/ha (2022) to $802/ha (2024)
- EBIT (Earnings Before Interest & Tax) dropped from $293/ha to $157/ha
- Insurance and grant income was minimal: $114K and $62K across all farms
- 48% of maintenance budgets, 23% of fertiliser, and 13% of debt repayment funds were redirected to cyclone repairs
- 6 farms refinanced a total of $1.48M in working capital to term debt
- Farmers applied 800–1,000 fewer tonnes of fertiliser in 2024
- 68% expect recovery within 1–2 years; 32% expect it will take 3–10+ years
This locally led analysis provided credible, evidence-based insights into the economic strain
Frequently Asked Questions
These studie were co-funded by DIA, MCI & Associates Ltd and the Cyclone Gabrielle Recovery team, thereby coming to no cost to ratepayers. Understanding the long-term economic impact of Cyclone Gabrielle is crucial for making informed decisions that could lead to more effective support for our rural sector and potentially identify cost-saving measures in the future.
The study aims to provide a clear understanding of the financial pressures on our rural sector, which is vital to the district’s economy. By identifying specific challenges, we can either develop targeted strategies to support our farming community ourselves or raise the concern to other responsible agencies, which will ultimately benefit the entire district. In the long run, this could lead to more sustainable economic growth and stability, positively impacting all ratepayers.
No, this project will have no direct impact on rates. The study is co-funded by MCI & Associates Ltd, and the Council’s contribution is funded through DIA funding for recovery.
By examining data over a six-year period, the study aims to capture the full extent of the cyclone’s impact and other external pressures on the rural sector. This long-term view will provide a comprehensive understanding of the challenges and how they evolve, ensuring that any solutions or strategies developed are based on solid evidence.
The data will be used to generate reports that will guide the Council’s decision-making process regarding support for the rural sector. These reports, expected in February 2025 and February 2026, will focus on financial indicators and feedback from farms, helping us identify where support is most needed and how best to provide it.
Given that nearly 70% of Tararua’s land is classified as rural, agriculture plays a critical role in the district’s economy. Understanding the specific challenges faced by the rural sector is essential for the overall economic health of the district. However, this does not mean that other areas are being ignored; the Council is exploring the economic climate of our district as a whole and all sectors affected by the cyclone.
This can be seen with the other economic report being completed by Infometrics results are expected in September 2024.
No, TDC will not receive any client data. The information collected will be aggregated and anonymised, ensuring that no individual farm’s data is identifiable. The focus is on trends and averages across the district, not on specific farms.