[7 June/The Country]

According to economists, economic risks associated with Mycoplasma bovis were rising. Last week, the eradication attempt was announced at a cost of $886 million, and the slaughter of 126,000 cattle. BNZ Senior Economist, Doug Steel, said there was more to it than just the initial impact on production from culling cows. Costs were increasing, farmer’s confidence was low and elevated uncertainty and risk threatened to decrease investment. Restricted stock movement threatened to alter current farm practices that could lead to a reduction of stocking rates. Animal welfare and grazing costs were also likely to increase. Mr Steele added the disease caused considerable angst across the dairy and beef sectors. BNZ saw the situation generating downside risk to GDP growth. Westpac Senior Economist, Anne Boniface, said eradication was a difficult task, as was managing the processes and ensuring the affected farmers were compensated.