US remains important market - Fonterra
Fonterra says the US continues to be an important market for New Zealand dairy and the co-op.
Few farmers will be surprised to know that the 2015-16 season was the most challenging year yet for them.
Figures released at DairyNZ’s annual meeting in Ashburton last week show the 2015-16 milk price of $3.90/kgMS was the lowest in ten years and it hit farmers who last season were on average operating at a break-even cost of $5.25/kgMS.
DairyNZ board chair Michael Spaans says despite an obvious shortfall in farm income, last season farmers worked to cut their costs of production.
“Our data shows farmers have become more efficient and fine-tuned their farm management – so much so, that in August we revised the average farm’s break-even cost down to $5.05/kgMS for 2016-17,” Spaans told the meeting.
“This is a rare positive from a period of low milk prices, and farmers should be immensely proud of it. Farmers’ ability to sharpen their pencils and remain focused is the key to maintaining our industry’s international competitiveness.”
The 2015-16 challenges were compounded by the low milk price in 2014-15. With no significant retrospective payments from the previous season, many farmers in 2015-16 increased debt to cover costs.
The previous 2014-15 season had been somewhat buffered by the $8.40/kgMS price of 2013-14.
Nationally, dairy farmers produced 1.862 billion kgMS, worth $8b in 2015-16.
The industry’s milk production benefited the NZ economy by $12.2b from dairy exports in 2015-16 and provided around 35,000 full-time jobs on-farm and a further 14,500 jobs in milk processing and wholesaling.
DairyNZ chief executive Tim Mackle says 2015-16 was another busy year for DairyNZ, which spends in the industry the $67m levy it gets from farmers, plus extra government and commercial cash.
“Spending farmers’ money in a wide range of programmes is designed to deliver direct benefits for farmers and the industry as a whole,” says Mackle.
“While each year we focus on supporting farmers through immediate issues such as managing the low milk price, we also maintain our long-term work in research, environmental management and our workforce.”
This coming year, $16m will be spent on farm profit, biosecurity and product integrity. Environmental work will receive $12m.
Fonterra says the US continues to be an important market for New Zealand dairy and the co-op.
Trade and Agriculture Minister Todd McClay says New Zealand's trade interests are best served in a world where trade flows freely.
New Zealand's red meat sector says it is disappointed by the United States' decision to impose tariffs on New Zealand exports.
OPINION: Farmers nationwide will be rubbing their hands with glee at the latest news from the Government about the RMA reforms.
Holstein Friesian NZ and Link Livestock have agreed on a strategic partnership to provide HFNZ members with comprehensive services from one of New Zealand's most respected dairy men.
Rural retailer Farmlands has launched a new casual clothing range available across 42 stores nationwide and through its online store.
OPINION: Is it the beginning of the end for Greenpeace?
OPINION: The good times felt across the dairy sector weren't lost at last week's Beef + Lamb NZ annual meeting.