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ASB head of rural banking Aidan Gent is encouraging farmers to speak to their banks when they are struggling.
Economists are optimistic of a small rise in this season’s farmgate milk price.
And a healthy new season price could be on the cards, though BNZ’s Doug Steel sounds a note of caution on that.
ASB’s Nathan Penny says the rise in milk fat prices sets the new season up fairly well.
“We are expecting $6.50/kgMS at this stage (2018-19) although it’s early in the season. But if these trends continue the new season will start on a strong footing.”
With the upside in the recent GDT auction, $6.60/kgMS could be on the cards for this season but given the lateness in the season it will not change too much from here, he says. But it could move 5c or even 10c (Fonterra’s current forecast is $6.55/kgMS).
BNZ’s Steel says most of this season’s milk has been sold so last week’s result is unlikely to shift forecasts much.
“But it does add to the idea that there may yet be a few cents to add to Fonterra’s (and our) $6.55 forecast.
“A higher NZ$, up 1.9% against the US$ since the previous dairy auction, does temper the dairy price gains when expressed in NZ dollars.”
Looking to the next dairy season (starting June 1), if current pricing and currency levels persisted over the coming 18 months it would generate a milk price in the mid-to-high $6 range, says Steel.
“Barring a major change over the next month, this might be where Fonterra places its first forecast for the new season (forecast due before the end of May).”
However BNZ thinks dairy product prices will ease over the coming year with more EU supply, new EU intervention rules and potential for a world demand slowdown such that by the end of next season milk prices will be in the low $6s.
“If dairy product prices don’t fall from present levels then the milk price will likely be higher than we currently think.
“Given farmer payment structures, dairy cashflows look set to be healthy through at least calendar 2018.”
Bankers have been making record profits in the last few years, but those aren’t the only records they’ve been breaking, says Federated Farmers vice president Richard McIntyre.
The 2023-24 season has been a roller coaster ride for Waikato dairy farmers, according to Federated Farmers dairy section chair, Mathew Zonderop.
Ministry for Primary Industries (MPI) director general Ray Smith says job cuts announced this morning will not impact the way the Ministry is organised or merge business units.
Scales Corporation is acquiring a number of orchard assets from Bostock Group.
Family and solidarity shone through at the 75 years of Ferdon sale in Otorohanga last month.
The Ministry for Primary Industries (MPI) has informed staff it will cut 391 jobs following a consultation period.
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