M.I.A.
OPINION: The previous government spent too much during the Covid-19 pandemic, despite warnings from officials, according to a briefing released by the Treasury.
A Ministry of Primary Industries report says the 2020-21 season payout won’t be as high as last season.
It says Covid-19 has impacted the dairy sector around logistics and supply channel disruptions.
However, it notes that despite the recent fall in commodity prices, dairy companies had contracted a high proportion of milk from last season at good prices and this helped.
But the outlook for the coming season is not good with markets signalling a 14% fall in farm gate prices.
It says the current range sits between $5.60 and $6.50/kgMS which will be close to, and in some cases below, break-even levels of profitability.
“It has the potential to undermine the financial viability of some marginal and highly indebted farm businesses,” says the report.
The report flags the potential of the drought and shortage of feed as being a factor, but points to concerns around protectionist and subsidised dairying in the US and the European Union.
It notes that if there is a flood of subsided dairy products on the global market this could add to the volatility and weakening of the dairy market which will impact on New Zealand.
Overall the report is stating what one might expect in the Covid-19 environment. Uncertainty in many areas and questions being asked about whether some trends, such as consumer preferences, will remain once life returns to whatever normal there will be in the future.
The report flags uncertainty and challenges ahead, mostly related to Covid-19.
The good news is that in the past year to the end of June, revenue from primary exports will be up by $1.7 billion on the previous year, helped significantly by dairy exports which were up $512 million from the start of March.
Academic Dr Mike Joy and his employer, Victoria University of Wellington have apologised for his comments suggesting that dairy industry CEOs should be hanged for contributing towards nitrate poisoning of waterways.
Environment Southland's catchment improvement funding is once again available for innovative landowners in need of a boost to get their project going.
The team meeting at the Culverden Hotel was relaxed and open, despite being in the middle of calving when stress levels are at peak levels, especially in bitterly cold and wet conditions like today.
A comment by outspoken academic Dr Mike Joy suggesting that dairy industry leaders should be hanged for nitrate contamination of drinking/groundwater has enraged farmers.
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