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Milk payout this season will be under stress, says MPI.
A Ministry of Primary Industries report says the 2020-21 season payout won’t be as high as last season.
It says Covid-19 has impacted the dairy sector around logistics and supply channel disruptions.
However, it notes that despite the recent fall in commodity prices, dairy companies had contracted a high proportion of milk from last season at good prices and this helped.
But the outlook for the coming season is not good with markets signalling a 14% fall in farm gate prices.
It says the current range sits between $5.60 and $6.50/kgMS which will be close to, and in some cases below, break-even levels of profitability.
“It has the potential to undermine the financial viability of some marginal and highly indebted farm businesses,” says the report.
The report flags the potential of the drought and shortage of feed as being a factor, but points to concerns around protectionist and subsidised dairying in the US and the European Union.
It notes that if there is a flood of subsided dairy products on the global market this could add to the volatility and weakening of the dairy market which will impact on New Zealand.
Overall the report is stating what one might expect in the Covid-19 environment. Uncertainty in many areas and questions being asked about whether some trends, such as consumer preferences, will remain once life returns to whatever normal there will be in the future.
The report flags uncertainty and challenges ahead, mostly related to Covid-19.
The good news is that in the past year to the end of June, revenue from primary exports will be up by $1.7 billion on the previous year, helped significantly by dairy exports which were up $512 million from the start of March.
Horticulture Minister Nicola Grigg says she takes her hat off to all NZ growers for the hard yards they have put in over the last few years which have resulted in horticulture exports expected to reach the milestone of $8 billion this year.
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The first phase of a Ministry for Primary Industries (MPI) investigation into allegations of mistreatment of sheep connected to shearing practices has been completed.
The ongoing rise of the Chinese middle class will drag up demand for New Zealand products there in the future.
The chair of the Otago Rural Support Trust, Tom Pinckney, says he believes that they will be especially busy in the coming months as the enormity of the floods hit home.
Commodity prices and interest rates play a huge role in shaping farmer confidence, but these factors are beyond their control, says Federated Farmers dairy chair Richard McIntyre.
DairyNZ is supporting a proposed new learning model for apprenticeships and traineeships that would see training, education, and pastoral care delivered together to provide the best chance of success.
Two agritech companies have joined forces to help eliminate manual entry and save farmer time.
The recent squabble between the Cook Islands and NZ over their deal with China has added a new element of tension in the relationship between China and NZ.
The world is now amid potentially one of the most disruptive periods in world trade for a very long time.
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