ANZ Warns of Milk Price Risks as New Dairy Season Begins
The new dairy season is kicking off with plenty of risks to the forecast farmgate price, both upside and downside, says ANZ agricultural economist Matt Dilly.
The cost of running a New Zealand farm is now 27% higher than it was before Covid, putting sustained pressure on profitability acrfoss the sector, according to new ANZ research.
The finding comes from ANZ's latest Agri Insights report, which analysed the financial performance of more than 4000 dairy, red meat, kiwifruit, arable and pipfruit customers, comparing the 2020-24 period with the previous five years.
It found that while general inflation had stabilised in recent times, cost increases within the farming system have become structural, meaning farms now need to lift productivity just to stand still.
Lorraine Mapu, ANZ NZ's managing director of business and agri, said events playing out in the Middle East are a reminder that global uncertainty - from geopolitical tensions to fuel supply and input volatility - add another layer of complexity for farmers.
"While we're not currently receiving customer requests seeking specific support for issues linked to the conflict, we're staying close to our customers and remain focused on supporting them through any emerging challenges," Mapu says.
"What this research shows, though, is that the businesses best placed to navigate that uncertainty are the ones with strong fundamentals, good visibility over their costs, and the ability to keep investing in productivity through the cycle.
"Farming is now a higher-cost business than it was five years ago, and that's not something that unwinds when inflation cools.
"The standout performers aren't necessarily expanding or taking bigger risks - they're the ones who know their systems well, time their spending carefully, and keep finding small productivity gains year after year."
The report shows the gap between average farms and the top performers continues to widen, pointing to significant untapped productivity potential across the sector.
The 2026 Holstein Friesian NZ Black & White Youth Auction has once again proven the strength of support behind the breed’s young people, raising $20,130 for the HFNZ Black & White Youth programme.
Westpac NZ has become the first New Zealand bank to receive approval from the Reserve Bank of New Zealand (RBNZ) to secure and leverage kiwifruit growers' Zespri shares.
Bank of New Zealand (BNZ) and Pāmu (Landcorp Farming Limited) have developed a new way for landowners to earn revenue from existing native forests.
Despite near universal optimism in the rural sector, a panel of New Zealand’s leading food and agri minds caution that the sector must be intentional about its future path.
The dairy industry cannot rest on its laurels despite providing one in every four export dollars earned by the country, says DairyNZ chief executive Campbell Parker.
The Government is looking at intervening on behalf of Waikato farmers who face new regulations around agricultural land use while Resource Management Act (RMA) reforms are underway.

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