Thursday, 25 January 2024 08:55

Editorial: Things are looking up

Written by  Staff Reporters
A weaker than expected Chinese economy and lower milk production are potential roadblocks for a decent farmgate milk price. A weaker than expected Chinese economy and lower milk production are potential roadblocks for a decent farmgate milk price.

OPINION: The first two Global Dairy Trade (GDT) auctions have delivered good news for dairy farmers.

Whole milk powder prices are on the up since November. However, a weaker than expected Chinese economy and lower milk production are potential roadblocks for a decent farmgate milk price.

Fonterra's revised forecast Farmgate Milk Price midpoint for the 2023/24 season is $7.50/kgMS, with a new forecast range of $7-$8/kgMS.

There's also some relief for dairy farmers with reducing feed and fertiliser costs. Overall, feed costs are projected to fall around 5% for the current season, driven by falling product prices.

According to DairyNZ, total farm working expenses have also seen an overall decrease, driven by feed and fertiliser prices this year, however, other costs continue to experience inflationary pressures.

DairyNZ's recently updated forecast data on the Econ Tracker, shows the national breakeven forecast currently sits at $7.79/kgMS.

DairyNZ is forecasting an average payout received of $8.06/kgMS, based on the estimated milk receipts for the 2023-24 season and dairy company dividends. This positive difference between the forecast breakeven and average payout will likely bring relief to some, particularly owner-operated farms.

While Fonterra's mid-point is still below the national breakeven forecast, the recent rises in global dairy prices augur well for farmers. But not everyone is optimistic about this season.

Ministry for Primary Industries (MPI) says dairy export revenue is forecast to decrease 7% to $24.1 billion in the year to 30 June 2024. This decrease comes off the back of record high export revenue of $26 billion in 2022/23.

With mixed messages from industry leaders, the onus will be on farmers to run a lean operation on farm.

With input costs on the decline and global dairy prices holding up, most farming businesses should end up in black.

More like this

Editorial: Time for a reset

OPINION: The Government's recent announcement that methane targets will be reviewed is bringing relief to farmers.

Editorial: On the mend

OPINION: DairyNZ's latest forecast data on the Econ Tracker, that the outlook for the current season has improved, will be welcome news for farmers.


Celebrating success

The Director General of MPI, Ray Smith says it's important for his department to celebrate the success of a whole range of groups and people around the country.

Biosecurity award for M. bovis work

A small company which mobilised veterinarians around the country to deal with Mycoplasma bovis was one of the winners in this year's Biosecurity Awards, held at Parliament.

Cyclone's devastating legacy

One of the country's top Māori sheep and beef farms is facing a five-year battle to get back to where it was before Cyclone Gabrielle struck just over 14 months ago.


Frontline biosecurity 'untouchable'

Biosecurity Minister Andrew Hoggard has reiterated that 'frontline' biosecurity services within Ministry for Primary Industries (MPI) will not be cut…

Machinery & Products

New name, new ideas

KGM New Zealand, is part of the London headquartered Inchcape Group, who increased its NZ presence in August 2023 with…

All-terrain fert spreading mode

Effluent specialists the Samson Group have developed a new double unloading system to help optimise uphill and downhill organic fertiliser…

» Latest Print Issues Online

Milking It

Plant-based bubble bursts

OPINION: Talking about plant-based food: “Chicken-free chicken” start-up Sunfed has had its valuation slashed to zero by major investor Blackbird…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter