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.
The dairy industry, along with all primary sectors, are going to have to be very proactive and innovative over the next two to three years to deal with the uncertainties created by Covid-19.
DairyNZ chief executive Tim Mackle told Dairy News that the industry is going to prepare a range of scenarios - from the worst to the best - to deal with the complexities that the Delta and other Covid variants might throw at the sector. He says it's anyone's guess as to what might happen and is important that planning done now to deal with any eventuality.
He says the dairy industry is a really important part of the economic engine that keeps NZ going and it is up to the industry to play its part in securing this objective. Dr Mackle notes that it's remarkable what has happened so far despite the pandemic.
"Last year Fonterra set a record for how much tonnage they exported and that's remarkable, given what happened. A lot of people are working pretty hard to continue to make it happen, including farmers," he says.
Mackle says one of the key reasons for the success of the sector during Covid has been the efforts of the Ministry for Primary Industries (MPI). He says they have done a magnificent job in advocating for the sector, to ensure common sense prevailed around how farmers and the rural sector could go about its business, pretty much as normal, despite restricted travel between Auckland and the rest of NZ.
"The Director General of MPI, Ray Smith, has been a real breath of fresh air and is a very strong and supportive leader.
"He's set the tone and we feel that MPI is really good ally for us and all the primary sectors. The dairy industry has also got to play its part and not let complacency set in," he says.
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