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.

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

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Negotiations Fail: Christchurch Convention Centre Build To Proceed Without PCNZ

After protracted negotiations, the government has ditched the construction consortium it picked to build Christchurch's replacement convention centre, which it now anticipates delivering at least two years behind the original schedule. More>>

ALSO:

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news