increase font size
Andrew Hoggard.
Dairy has got its mojo back. After two challenging seasons, last week brought two items of great news for Fonterra farmers.
The current season’s farmgate milk price jumped 15c to $6.15/kgMS and, with Fonterra’s forecast dividend of 40c a share, the co-op’s farmers can look forward to a $6.55/kgMS payout for the year to July 31.
Fonterra also forecast an opening price of $6.50/kgMS for the 2017-18 season, starting June 1.
This is music to farmers’ ears: the improved forecasts follow two very poor seasons in 2014-15 and 2015-16, when farmers struggled to break even. At $6.50, most farmers will be set up for a season in the black.
Farmers were expecting Fonterra to deliver good news; five consecutive Global Dairy Trade auctions had hoisted the price index and, crucially, the return for whole milk powder, the price setter.
The solid payout figures are not only cheering-up farmers and their families; rural towns will also get a much-needed financial boost.
Federated Farmers says based on Fonterra’s forecast ($6.15) and current production cycles, an extra $280 million is expected to flow through the New Zealand dairy sector and wider provincial communities this season.
Given the amount of milk we are producing at present this means the average dairy farm will be $23,000 better off. This will enable investment in farm businesses and infrastructure, little seen during the last two tough years.
And Feds dairy chairman Andrew Hoggard points out that farmers will, importantly, also have more money for pressing on towards their environmental goals, which many have kept in view despite their modest returns.
The New Zealand dairy sector employs at least 40,000 workers and is widely acknowledged as a large and crucial contributor to regional economies. So now the regions and their towns and service centres will again be boosted as encouraged farmers resume spending.
All this said, Fonterra and its farmers are wary of the fickleness of the global dairy trade. Farmers will be mindful of the recent downturn and the short-notice volatility of markets.
But for now, farmers will have a bit more money to spend and rural NZ will reap the rewards.
OPINION: Entering Parliament back in 2023, I wanted to help put the fun back in farming. After six years of Labour, rural New Zealand was tired of the relentless waves of red tape and compliance, draining joy from people who just want to work the land.
OPINION: One particular bone the Hound has been gnawing on for years now is how the chattering classes want it both ways when it comes to the success of NZ's dairy industry.
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.
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.
OPINION: Fonterra's $4.22 billion consumer business sale to Lactalis is ruffling a few feathers outside the dairy industry.
Alliance has announced a series of capital raise roadshow event, starting on 29 September in Tuatapere, Southland.
State farmer Pāmu (Landcorp) has announced a new equity partnership in an effort to support pathways to farm ownership for livestock farm operators.
Following a recent overweight incursion that saw a Mid-Canterbury contractor cop a $12,150 fine, the rural contracting industry is calling time on what they consider to be outdated and unworkable regulations regarding weight and dimensions that they say are impeding their businesses.
Trade Minister Todd McClay says his officials plan to meet their US counterparts every month from now on to better understand how the 15% tariff issue there will play out, and try and get some certainty there for our exporters about the future.
Brett Wotton, an Eastern Bay of Plenty kiwifruit grower and harvest contractor, has won the 2025 Kiwifruit Innovation Award for his work to support lifting fruit quality across the industry.
OPINION: Westland Milk may have won the contract to supply butter to Costco NZ but Open Country Dairy is having…
OPINION: The Gene Technology Bill has divided the farming community with strong arguments on both the pros and cons of…
