Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Keep a close eye on farm costs, says DairyNZ

MEDIA RELEASE
Wednesday, 30 July 2014

For immediate release
Keep a close eye on farm costs, says DairyNZ


Dairy farmers should pay close attention to farm costs this season, says industry body DairyNZ, in response to the reduced 2014/15 forecast milk price announced yesterday.

Fonterra’s forecast milk price being reduced from $7 to $6 per kgMS means volatility is part of everyday life and dairy farmers will be conservative when making farm decisions this season.

DairyNZ economists estimate the reduced payout could cut national income by $1.8 billion this dairy season – an average per farm loss of about $150,000 (based on 2013/14 milk production).

DairyNZ chief executive Tim Mackle says for many farmers, $6 per kgMS is a break-even payout, meaning little capital expenditure or principal payments will take place in 2014/15.

“While it is unclear where prices could be at the end of the season, volatility requires farmers to be prepared to react to changes quickly,” says Tim. “Now is obviously a good time to look at updating or developing a cashflow budget based on a $6 per kgMS milk price.

“Look at where the fat can be trimmed and where efficiency gains can be made, for instance growing and utilising more homegrown feed and looking at where supplementary feed can be reduced.”

Farmers should also look at what contingency plans are in place for a possible dry summer – perhaps early culling and once-a-day milking, rather than supplementary feed. And with large tax bills looming from last year’s record season, farmers should also contact their accountant to re-calculate their tax.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

For more information on budgeting, visit www.dairynz.co.nz/budgets.

SIDEBAR
Regional impacts of reduced milk price

The estimated drop in farmer income ($7 down to $6 milk price)*.

Northland – $100 million
Waikato – $484 million
Bay of Plenty – $126 million
Taranaki – $183 million
Hawke’s Bay – $15 million
Manawatu – $82 million
Wairarapa/Tararua – $60 million
Canterbury – $353 million
Otago – $92 million
Southland – $218 million

New Zealand – $1.825 billion

*Based on $1 drop multiplied against estimated regional production.

-ENDS-

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.