Friday, 23 October 2015 09:23

Bank says it will back farmers

Written by 

Westpac wull support its dairy customers to the tune of about $2/kgMS deficit in their cashflow this year, says Mark Steed, head of agribusiness and property.

"It is a case of coming through [the deficit] in the medium term and coming out the other side," he says.

Steed says the banking sector saw the agri sector as highly volatile. Sheep, beef and horticulture are doing reasonably well but dairy is going through volatility. "The role Westpac has -- and all banks -- is to manage that volatility, assist in the volatility variances in some way.

"Our role is very much to stand by the customers through the highs and the lows.

"We are obviously seeing the lows in the dairy sector. We are ensuring we come through that in a moderate kind of way. It is intriguing that a number of our dairy customers have some variances in their cost base when you think about production. Some have costs around $3.50/kgMS to as high as $5.50/kgMS and when you overlay the leverage on top of that, interest is another $1-$1.20/kgMS.

"So when you've got a payout at $4.60/kgMS that is going to be really challenging. We expect to have to support our customers to the tune of about a $2/kgMS deficit on the cashflow this year."

More like this

China still hungry for NZ dairy

Demand for New Zealand dairy products should remain solid despite China’s mixed economic outlook, says Imre Speizer, Westpac.

Don’t shut borrower out of mediation

A cost of $6000 for mediation between an indebted farmer and a bank would be at the lower end of the cost spectrum, says Federated Farmers sharemilkers chairman Richard McIntyre.

» The RNG Weather Report

Featured

Vaccinations protect people, animals

As we struggle to fathom how we ended up in the throes of a measles outbreak again, we’re reminded of the importance of vaccinations to protect us from life-threatening diseases.

 

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Lack of interest

The final list of candidates for Fonterra’s board election is out. Surprisingly only one candidate came through the farmer nominated…

DairyNZ poll

Talking about elections, the DairyNZ board election is shaping up to be a much more exciting affair.

 

» Connect with Dairy News