Friday, 18 February 2022 11:55

Record milk price a boon for Northland farmers

Written by  Sudesh Kissun
Northland regional Federated Farmers dairy chair Matt Long says a record milk price this season would be a huge psychological boost for local dairy farmers. Northland regional Federated Farmers dairy chair Matt Long says a record milk price this season would be a huge psychological boost for local dairy farmers.

A record milk price this season would be a huge psychological boost for Northland farmers, says the region's Federated Farmers dairy chair Matt Long.

He expects farmers to use the extra income to reduce debt and improve the environmental footprints of their business.

"I also expectsome to spend on productivity improvements and some well-earned spending on things to improve their lifestyle," Long told Rural News.

"The forecast payout is very positive, but necessary given soaring inflation of input costs."

Long points out that soaring costs and worker shortages remain the biggest challenges facing local farmers, who endured a severe drought in the previous two seasons.

Fonterra's latest milk price forecast for the season is in the range of $8.90 to $9.50/kgMS, with a mid-point of $9.20/kgMS.

For Northland, based on milk production of around 81 million kgMS at $9.20 payout would pump nearly $750 million into the region's economy.

BNZ economist Doug Steel notes that dairy prices have started the New Year in fine form, pushing higher from the already elevated levels reached in 2021.

"Prices are 28% above a year ago, nearly 38% higher than their 5-year average, and at their highest level since 2014," notes Steel.

An expected 4% drop in NZ milk production is one of the factors keeping the milk price at record levels.

"While there is some rain in the near-term forecast, we expect NZ milk production to remain below last year's strong late season outcomes over coming months such that the full season will be down in the order of 4% or more," he says. Milk production in key overseas markets - the US and Europe - is also spluttering. Tighter supply is also pushing prices up.

But Steel says there are some downward risks as well - China's growth could be slower than anticipated and Omicron is still looming large around the globe.

But for now, at least, milk price prospects are strong.

"For farmers facing such things as variable weather, higher costs, rising interest rates, proposed options to price agricultural emissions, an exceptionally tight labour market, and the possibility of significant disruption from Omicron circulating in the community - it is good to take one thing off the worry list."

Having been hit by a severe drought over the previous two seasons, Northland's milk production is tracking well.

Long says Northland's climate is highly variable.

"I think after a difficult start to the season most farms will be having at least average production," he says.

However, like most other growers, they are also facing soaring input costs.

On his farm at Matapouri, eastern Whangarei Long milks 200 cows and hopes to supply 65,000 kgMS this season.

"We are rebuilding after two years of quite intense drought," he says.

More like this

Fonterra posts solid results

Fonterra has delivered a solid half-year result, thanks to higher margins and sales volumes across the co-op's diversified product and category mix.

Featured

Sheep drench resistance costly

Analysis by Dunedin-based Techion New Zealand shows the cost of undetected drench resistance in sheep has exploded to an estimated $98 million a year.

Dairy sheep and goat turmoil

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Hurry up and slow down!

OPINION: We have good friends from way back who had lived in one of our major cities for many years.

National

Knowing bugs means fewer drugs

A mastitis management company claims to deliver the fastest and most accurate mastitis testing available at scale for New Zealand…

Machinery & Products

AGTEK and ARGO part ways

After 12 years of representing the Landini and McCormick brands in New Zealand, Bay of Plenty-based AGTEK and the brands’…

100 years of Farmall Tractors

Returning after an enforced break, the Wheat and Wheels Rally will take place on the Lauriston -Barhill Road, North-East of…

JD unveils its latest beast

John Deere has unveiled its most powerful tractor ever, with the launch of the all new 9RX Series Tractor line-up…

Biggest Quadtrac coming to NZ!

In the biggest announcement that Case IH Australia/New Zealand has made around its tractor range, its biggest tractor is about…

» Latest Print Issues Online

The Hound

Why?

OPINION: A mate of yours truly wants to know why the beef schedule differential is now more than 45-50 cents…

Fat to cut

OPINION: Your canine crusader understands that MPI were recently in front of the Parliamentary Primary Sector Select Committee for an…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter