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.
This was revealed last week at DairyNZ's annual meeting in Morrinsville.
Dairy earnings for the year totalled $13.2 billion. Waikato remains the dairy heartland with 34% of the herds; it produced $2.4b of milk last year.
The Waikato's 4020 dairy herds produced 518m kgMS in 2014-15, 27% of NZ's total milk production. But Waikato's $2.4b earnings were down $1.8b on the 2013-14 season when the high milk price ($8.47 average payout) boosted the region's coffers by $4.2b.
Outgoing DairyNZ chairman John Luxton says the 2014-15 season's low milk price has affected all farms as owners and sharemilkers strove to remain profitable.
"The value of milk production to Waikato's economy is huge; the region takes a big hit when farmers do," says Luxton.
The North Island had 74% of herds, producing 59% of total milksolids; the South Island 26% of herds but produced 41% of milksolids.
The industry employed 40,730 people during the year; 27,830 worked on farms and 12,900 in processing and wholesaling.
The total number of herds reached 11,970; average herd size was 419. Last year the industry had 5 million cows.
