Dairy power
OPINION: The good times felt across the dairy sector weren't lost at last week's Beef + Lamb NZ annual meeting.
DairyNZ has updated the national breakeven forecast to $7.78/kgMS, a 27c increase from its previous forecast.
The breakeven milk price is the milk sale price per kgMS to cover the farm’s costs in a season, excluding capital expenditure and principal repaid on loans.
DairyNZ head of economics, Mark Storey, explains that the breakeven figure has been updated based on new pricing information, tax changes and in response to milk price and dividend payment announcements.
“Outside the breakeven milk price, we have seen farm expense forecasts increase, impacting overall costs, while revenue expectations have shifted with high dividend payouts, accompanied by decreasing milk price expectations for the 2023/24 season,” says Storey.
“It’s also important to understand your overall business. The breakeven milk price is one indicator, however operating profit margin, debt-to-asset ratio and return on assets are all part of a farm’s overall business picture.
“Some of these indicators are available on the Econ Tracker, to allow farmers to see how their numbers compare and consider where they may require additional support to get through the season ahead.”
DairyNZ is also encouraging farmers to plan for the months ahead, amid increasing costs and an expected El Niño weather pattern potentially bringing a variety of challenges on farm.
DairyNZ’s general manager of farm performance, Sarah Speight, explains that right now farmers need to focus on growing and utilising as much pasture as possible, as it remains the cheapest source of feed.
“Farmers are faced with high costs, so attention to detail and a focus on financial outcomes ahead of production will drive better business outcomes,” says Sarah.
“This is especially important at this time of year where pasture cover and getting cows back in calf will determine financial and production outcomes, not just for this season, but into next season too.”
The new forecasts are published on the DairyNZ Econ Tracker and expressed as a national average, which does not necessarily reflect individual farm situations.
Farmers can contact their DairyNZ regional team, call 0800 4 DairyNZ, or go online to dairynz.co.nz/budgeting for more information and advice on how to navigate the season ahead.
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.