Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
He says last week’s successful levy vote provides DairyNZ with confidence as it heads into the future.
The levy vote, held every six years, closed May 30. Provisional results show 57% of the 11,747 levy paying dairy farmers voted and of those who voted, 69% voted ‘yes’ to continuing the levy.
Weighting the vote by milksolids production shows even greater representation and support for the levy, with this year’s votes equating to a 67% farmer vote and 74% voting ‘yes’. DairyNZ is funded by the milksolids levy.
Van der Poel says the New Zealand dairy sector is progressive and farmers have illustrated a clear mandate that they want an industry good organisation which represents and supports them to continue as a successful sector.
“The milksolids levy underpins a wide range of industry good work, including the sector strategy Dairy Tomorrow, and we are pleased this year’s levy vote will enable DairyNZ to continue that work on behalf of dairy farmers.”
The milksolids levy vote was a simple ‘yes’ or ‘no’ vote for each levy paying farm owner, sharemilker or leaseholder.
Final results will be available once the total milksolids produced for the 2019-20 season is known in late June. However, DairyNZ doesn’t expect any significant change.
A clear indication of farmer support is required for DairyNZ to make a new levy application to the Minister for Primary Industries to approve the ongoing levy for the next six years.
Van der Poel thanked every dairy farmer who voted.
“Having a farmer mandate gives us a stronger voice when important decisions are underway, where sector feedback can result in significant change.”
He says DairyNZ will continue to deliver the best research and on-farm tools and support.
“Securing a better future for dairy farmers is the biggest motivator for the DairyNZ board and staff and we are looking forward to continuing our work. This levy campaign will inform our priorities and we have a lot of work ahead of us,” says van der Poel.
“The 2020 season has been challenging with weather, COVID-19 and some uncertainty, so we have some work to do as an organisation and we look forward to ensuring we have farmers’ support and active engagement going forward.
“We’ve picked up a lot of useful feedback from farmers through this process, which we’ll use to improve our service to farmers going forward.”
Levy paying farmers contribute 3.6c/kgMS produced. The levy rate gets reviewed by the DairyNZ Board each year. It has remained at 3.6c/kgMS since 2008 and DairyNZ has committed that it will remain at that level for the 2020-21 season.
