Returns lift, costs down - DairyNZ
The outlook for dairy farmers this season has improved, especially when compared to forecasts only six months ago, according to DairyNZ.
The latest drop in the Global Dairy Trade price index will impact many farmers carrying a lot of debt, says DairyNZ chairman John Luxton.
Now banks must give young farmers leeway as they work their way through the crisis.
“Hopefully in 12 months there will be a much stronger industry going forward,” he told Dairy News.
The price index fell 9.3% in the latest GDT – the 10th consecutive fall, bringing it to levels not seen since 2002.
Whole milk powder, a crucial product for New Zealand, fell by 10.3% on average to US$1590/tonne.
Skim milk powder prices slumped by 14.4% to US$1419/t on average.
Anhydrous milk fat prices fell by 11.7%, butter by 6.1% and butter milk powder by 5.1%.
Luxton says NZ is very exposed to a thinly traded market.
“One outcome of the low GDT is likely to be a rapid lowering of our cost systems and probably some reduction in milk production out of NZ.
“When you look at the world market there isn’t a big overhang of surpluses despite what people are saying. The supply and demand is reasonably well balanced.”
Federated Farmers claims that the Otago Regional Council is charging ahead unnecessarily with piling more regulation on rural communities.
Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.
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