increase font size
Subsidies handed to European farmers are partly responsible for the dip in global dairy prices, says Federated Farmers Dairy chairman Andrew Hoggard.
Opening the Dairy Council and Sharemilkers' section conference in Nelson today, Hoggard says this structural issue is adding downward pressure on prices.
Hoggard attributed the dairy downturn to both "cyclical and structural nature".
"It started with a single cyclical event; low demand from China and high levels of supply worldwide," he says.
"But what is holding down prices is an underlying structural issue with the global dairy market."
Dairy remains one of the most highly protected marketed products in the world.
Only 13% of global dairy consumption is accessible to NZ dairy exports at tariffs below 10%, Hoggard says.
These barriers mean only a small volume of global products is traded; liquidity of the global dairy market is constrained making it more prone to volatility.
"And then this volatility is compounded because some of the large developed milk producing countries continue to use subsidies and supports to shift the price risk from their farmers and onto the international market," says Hoggard.
"And then it is the international market that shifts the milk price."
Hoggard says its hypocrisy for these subsidised farmers to declare they want to export but not import.
"Sorry guys it's a two way street.
"Subsidies and support payments have the effect of insulating farmers from the reality of the world markets."
Federated Farmers says new legislation replacing the Resource Management Act will cut red tape, unlock investment and help grow New Zealand's export-led economy, after the Planning Bill and Natural Environment Bill passed their third reading in Parliament yesterday.
Leading figures from the major political parties will be questioned on their primary sector policies at the Rural Issues Debate at Mystery Creek Events Centre, Hamilton, on 30 September.
OPINION: Well, the silly season is upon us and all us politicians are running around shaking babies and kissing hands, or maybe the other way around.
Will the good times last? That's one of the key issues to come out of the latest Federated Farmers confidence survey.
It was billed as a chance for all the political parties to woo the rural vote, but question marks hang over just how effective this was.
LIC shareholders have elected a new North Island representative to the co-operative's Board, along with five representatives to its Shareholder Reference Group (SRG), following the company's Annual Meeting held in Invercargill.
Farmers across parts of Southland and South Otago are continuing to deal with difficult conditions after a prolonged run of wet weather, with pressure building around feed supply, stock management, pasture damage, farm infrastructure and everyday workloads.
Federated Farmers says it welcomes Labour's commitment to reviewing the Sharemilking Agreements Act, calling on other major parties to do the same.
For Canterbury dairy farmers Sian Meijer and Rick Wobben, wearable technology has become one of their most valuable on-farm tools - helping manage 1850 cows across an expansive, high-performing dairy operation while improving efficiency, mating outcomes and day-to-day decision making.
Fonterra has unveiled its annual results for the 2026 financial year, posting $27 billion in revenue and close to $20 billion returned to New Zealand farmer owners and unit holders.
The first major update to the Dairy Cattle Code of Welfare in more than a decade has been released, marking what DairyNZ describes as an important step in ensuring animal welfare standards continue to evolve alongside scientific evidence and on-farm realities.
