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Sizeable lift in on-farm salaries but labour challenges remain – latest Federated Farmers/Rabobank Remuneration report

Salaries for farm employees across the dairy, sheep/beef and arable sectors have grown strongly over the past two years as employers faced challenges from a continued shortage of on-farm workers, the 2022 Federated Farmers – Rabobank Farm Salaries Remuneration Summary Report has found.

The report — which collates the results of a remuneration survey conducted across late 2021 and early 2022 — found salaries across on-farm positions were up by a weighted average of 14 per cent since 2020, with the mean salary rising to $63,931.

Dairy sector salaries increased by an average of 15 per cent, the report found, with salaries for sheep/beef positions up by an average of 14 per cent and arable salaries up by an average of eight per cent.

In addition to data and trend analysis for salaries across a number of on-farm roles, the report also provides a range of other information relating to on-farm positions including Total Package Values (which factor in other employment benefits such as food and vehicle use), workers’ length of service, accommodation costs and weekly hours worked. Rabobank has partnered with Federated Farmers since 2008 to develop the report which is intended for use as a reference guide by both agricultural sector employers and employees.

Rabobank New Zealand CEO Todd Charteris

Rabobank New Zealand CEO Todd Charteris

Rabobank New Zealand CEO Todd Charteris said it was encouraging to see remuneration for on-farm roles growing strongly given the huge contribution the sector had made to the country’s broader economy in recent years.

“The food and agri sector has been the shining light of the New Zealand economy since the onset of the Covid-19 pandemic, and it’s promising to see those working in the sector are now receiving significantly higher salaries than they were two years ago,” he said.

“For the sector to continue to flourish, it’s essential it is viewed as an attractive place to work. And competitive remuneration is a key ingredient that will help to entice school leavers and other workers into on-farm roles.”

Key drivers of salary growth

While he was pleased to see farm salaries on the rise, Mr Charteris said it was also important to acknowledge the challenges employers of on-farm workers have faced to source new staff over recent years, and the key role this has played in driving up on-farm salaries.

“Farm owners have found it increasingly difficult to source skilled labour over recent seasons, and this is highlighted by the report which found close to 70 per cent of employers were now finding it harder to source good employees than 12 months ago.

“Covid-19 border restrictions have, of course, contributed to this situation by limiting access to overseas workers, while New Zealand’s low overall unemployment rate has also hindered efforts to get more local workers to take on new jobs in rural locations.”

As a result, Mr Charteris said, farm employers have had to pay more to attract and maintain good staff.

“The government’s recent announcement that it will provide border exemptions for 1580 international primary sector workers will help alleviate these labour shortages, however, it’s clear more needs to be done by the industry to encourage young New Zealanders into careers in the sector,” he said.

Mr Charteris said recent changes to immigration policy were another factor that had contributed to increased salaries on-farm.

“Since mid-last year, international workers have been required to earn an hourly rate above the median wage to be eligible for some lengths of visa. And, in some cases, this has prompted employers to bump up their existing international workers’ salaries to ensure they surpass this threshold and are therefore eligible for a longer visa period.”

Other factors which have played a part in the on-farm salary growth over the past two years include the heathy returns for farming businesses over this period, and the high recent rate of inflation.

Around the sectors

The report found only minor differences in the average salary across the three sector groupings. Arable workers earned the largest average salary at $65,498, with this slightly surpassing the average salary for dairy workers of $64,658 and the average sheep/beef salary of $62,352.

Mr Charteris said the Dairy Operations Manager role – the most senior dairy position - recorded the largest salary increase of all the surveyed on-farm positions, jumping by 27 per cent from two years ago to a mean of $107,593.

“This is the highest average salary of all the surveyed roles and reflects the significant responsibility that comes with this role which includes managing the farm’s physical performance and budget as well as negotiating with a host of farm supply companies,” he said.

“There was also a big jump in the most senior arable sector role (up by 20 per cent) while there were strong salary increases as well for some entry level roles including dairy farm assistant (up by 17 per cent) and sheep /beef general hand (up by 16 per cent).”

The report found accommodation was being provided for 75 per cent of dairy employees, 61 per cent of sheep/beef employees and 41 per cent of arable workers.

“Accommodation continues to be provided for the majority of on-farm employees,” Mr Charteris said. “And while the vast majority of employees will pay some rent, it’s generally a much smaller proportion of their weekly salary than is typically the case for workers in other sectors based in urban locations.”

Federated Farmers Report Summary

Rabobank New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 120 years’ experience providing customized banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 36 countries, servicing the needs of about 8.6 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading agricultural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 30 offices throughout New Zealand.

Media contacts:

David Johnston
Marketing & Media Relations Manager
Rabobank New Zealand
Phone: 04 819 2711 or 027 477 8153

Denise Shaw
Head of Media Relations 
Rabobank Australia & New Zealand 
Phone: +612 8115 2744 or +61 2 439 603 525