Wednesday, 26 June 2019 12:55

Farmers face uncertainty, seeking answers – Govt

Written by  Peter Burke
Agriculture Minister Damien O’Connor at the recent National Fieldays. Agriculture Minister Damien O’Connor at the recent National Fieldays.

Agriculture Minister Damien O’Connor says there is unlikely to be much growth in production in the dairy sector in the coming year.

He told Dairy News at National Fieldays in mid-June that if there is any increase in production, the cash is likely to go into repaying debt.

His comments line up with most commentators’ view that the mood of dairy farmers is pessimistic because of central government policies and local government regulations. And they are fed up with public and media bashing of their industry.

O’Connor says he’s aware farmers are facing uncertainty in many areas and want answers, and that they have high debt burdens.

But many positive things are also happening, he says.

“The price projections for next year are pretty positive. Some farmers out there are getting on and doing a great job, keeping their costs down and probably looking at this next year’s payout as a real bonus.” 

O’Connor says he wouldn’t be surprised if farmers’ spending at Fieldays was down because most will be focusing on reducing debt and being cautious.

The recent ‘Situation and Outlook’ report by the Ministry for Primary Industries sees 2019 being a good year for export earnings – up 5.7% to $17.6 billion. But it predicted much more modest growth over the next four years and only small increases in milk production and milk solids per cow production over the coming years. 

Some people told Dairy News at Fieldays that they regard the export earnings increases as optimistic and that the ongoing decline in dairy cow numbers is a worry. The report says more rules being imposed on dairying will limit intensification of dairy farming practices. It says this will vary from region to region.

There is both good and bad news for dairy farmers internationally, the report says. The strong production season in NZ contrasted with poorer seasons in Australia, Europe and the US, helping support better prices for NZ products. But in the same paragraph the report notes the volatility of the GDT auctions.

China is now the main importer of NZ dairy products, taking 31% -- well ahead of the next-largest, Australia, which takes just 7%. Such imbalance raises the risk to NZ, says MPI, because any reduction in demand could affect prices and volumes of goods sold there. It also quotes the OECD as indicating a slowing of the Chinese economy.

In NZ, despite a reasonable forecast pay out, dairy farm debt last year increased by 0.9% to $41.3 billion and there was a small increase in the number of non performing loans. This is making banks and some farmers nervous, given also the pressure imposed on them by the Zero Carbon Bill and other regulations and negative comments in the media.

 

More like this

An actual plan or more woolly thinking?

Despite claims by Agriculture Minister Damien O’Connor that a new report will be the plan “to revitalise New Zealand’s strong wool sector…” there’s widespread belief it will do no such thing.

Are the workers there?

Despite the critical function the primary sector has to play in New Zealand’s economic recovery, it may not have the workforce available to carry this role out.

Featured

 

Limited feed puts ewes at risk

Severe feed shortages in parts of the country mean many ewes are on a nutritional knife-edge heading into lambing and could be at risk of developing metabolic disorders.

Jack’s unique solution

Jason Jack was left with severe spinal injuries after a wakeboarding accident when he was 29, but that hasn’t stopped him getting out and about in difficult environments.

National

$10 payout!

A small but select group of Fonterra farmers are on the cusp of setting a new milk payout record.

The migrant workers dilemma

Dairy farmers want more Kiwi workers, but they also want relaxed immigration restrictions. So, what's the problem?

Producing milk, the Miraka way

The goal of Māori-owned dairy company Miraka, near Taupo, is to become the most sustainable dairy company in the world.

Machinery & Products

Landpower invests in cow central

One of Australasia’s largest, privately-owned farm machinery distributors, Landpower is building a new $10 million complex adjacent to Hamilton Airport.

Maize moisture in a moment

With forage maize playing such an important part of the New Zealand fodder supply chain, a useful hand-held moisture measuring…

» The RNG Weather Report

» Latest Print Issues Online

Milking It

A ticking timebomb?

There could be another dairy health scare brewing in China and this one starts in our backyard.

Please explain

Does anyone in the Government understand the essential role St John Ambulance has in our society?

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter