Tuesday, 19 May 2020 08:15

Ag’s big break coming soon

Written by  Sudesh Kissun
Sir Henry van der Heyden. Sir Henry van der Heyden.

Former Fonterra chairman Sir Henry van der Heyden is predicting “a big shift” in New Zealand agriculture in a post COVID-19 world.

He believes the sector will have a wonderful opportunity to reset itself.

Speaking last week on a webinar, organised by the Rural Support Trust, the Waikato agribusiness leader noted that agriculture has always been the backbone of the economy.

“We have been the driving the economy; the economy cannot do without us,” he says.

“I think that’s lost and a little forgotten over the last five to ten years.

“Post COVID-19 will provide a wonderful opportunity to come to the fore again.”

However, he warned farmers there will be challenges from a looming global recession, which will result in high unemployment and a drop in income. This will cause realignment in global demand and supply of milk.

Van der Heyden says no one is sure how things will play out in the next 12 months.

“We are in a period of uncertainty: no one actually knows what’s going to happen going forward.”

Commenting on the forecast milk price for 2020-21, van der Heyden noted some banks were predicting between $5.60 and $5.75/kgMS.

Van der Heyden, who is chairman of Rabobank Australia, says those numbers “feel conservative”.

“I’m still hoping we will have a six in front of the payout.”

His message to farmers is to budget conservatively.

“I feel this is a time for many of us to be conservative.”

While uncertain about the next 12 months, van der Heyden says he remains positive about dairying.

“I think we are going into a recession. There will be high unemployment and incomes will be down, but fundamentals of food will come to the fore.

“Milk price will depend [on] the fundamentals of supply and demand.”

He also urged farmers to maintain a strong relationship with their bankers.

“Banks don’t like surprises: stay close to your budgets and keep the banks informed”.

Van der Heyden served as Fonterra chairman between 2002 and 2012. He has farming interests in NZ and Chile.

More like this

Overstayers irk farmers

A new law preventing the eviction of tenants from rental properties is causing a headache for some dairy farmers.

Memorable vintage

With a backdrop of COVID-19, this has been a harvest like no other.

Distributor focussing on farmer support

AGCO Australia and New Zealand has announced plans focused around protecting the welfare and livelihood of its customers, employees and the community during the COVID-19 pandemic. 

Featured

ANZCO makes a $30m profit

Meat company ANZCO Foods recorded its best-ever revenue of $1.7b and a net profit before tax of $30.6m for the year ended 31 December 2019.

 

M. bovis – we’re making headway

Ministry for Primary Industries chief science adviser, Dr John Roche on the indications New Zealand is winning the fight against Mycoplasma bovis.

Delays ruled out on water reforms

Delaying the introduction of new water reforms was not an option according to the two cabinet Ministers directly involved – Environment Minister David Parker and Agriculture Minister Damien O’Connor.

$700m for freshwater clean up

The Government has announced a $700 million fund to support the primary sector and other groups in meeting new clean water standards.

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Dirty water

The Hound understands that Federated Farmers has been cut out of the information loop, for the past year, on the…

Who’s paying?

Your canine crusader noticed a full-page ad recently run in a farming paper calling on meat companies SFF and Alliance…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter

Popular Reads

Drop in payout looms

Dairy farmers are being told to brace for a big drop in milk payout next season.