What rising fuel costs mean for farmers and growers

We’re all feeling the 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 across the board, and when input costs rise quickly, cash flow is usually the first place you feel it.

Starting from a position of strength
The good news is that 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. New Zealand is 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 been working with Z Energy to secure an additional 90 million litres of diesel, expected to arrive mid-year, as a buffer against potential supply disruptions. Supply isn’t the issue right now. Price volatility is.

What you can control
You can’t influence global fuel markets, but you can stay on top of how fuel is used on your farm or orchard. A few practical steps worth looking at:

• Maintain your machinery. Check tyre pressure, wheel alignment, and keep up with regular servicing. Small things add up.
• Don’t forget the trailer tyres. They’re easy to overlook, but worn tyres can meaningfully increase your fuel use.
• Cut idling time. Idling burns more fuel than most people expect. Switch off if you’re stopped for more than a few minutes.
• Slow down. Even modest reductions in speed can make a real difference over time, especially across longer distances.
• Choose tyres carefully. Low rolling resistance tyres can help you get more out of every litre.

Get your cash flow in front of you
When costs are rising and margins are under pressure, having a clear picture of your cash flow isn’t just useful, it’s essential. Knowing what’s coming in, what’s going out, and when, means you can make decisions with confidence rather than react when things get tight.

If fuel costs are starting to squeeze your operation, it’s worth revisiting your budget and forecasts now rather than later. Are your income targets still realistic? Are there expenses that could be trimmed without affecting your operation? Do you have enough buffer if costs stay elevated through the season?

If you have expansion plans in the pipeline, it’s also worth weighing those up carefully against your current position. Growth is still possible, but timing and structure matter more when margins are thinner.

We help Hawke’s Bay farmers and growers build budgets that reflect reality, forecast ahead with confidence, and manage costs before they become a problem. If you’d like to talk through how rising input costs are affecting your numbers, get in touch.

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