Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
DairyNZ's extension manager Andrew Reid says there’s some truth in the suggestion that a whole generation of farmers have never relied solely on grazing their cows on grass.
He says some have fed nothing but supplements, their use having coincided with the higher farmgate milk prices.
But the last 18 months have been a wake-up call for farmers to rely more on pasture as the main source of feed.
New Zealand farmers’ ability to manage grass pastures gives them a competitive edge over other dairy farmers in the world, Reid says. This is the point of DairyNZ’s Pasture First message.
“The main thing now is for them to grow quality pasture and make efficient use of it. They can’t relax on that and should note what stock demand is and not be as ready as they have been to call in the feed truck,” Reid says.
In this season farmers should “have their finger on the button in terms of their pasture” to ensure during summer they don’t waste opportunities.
Response to the Pasture First message has been good, Reid says, but some farmers find it challenging to implement this philosophy because they appear to lack confidence to run such a system.
“For years people could afford to buy in feed; but now the fundamental message is to have the confidence to make decisions on pasture management because many cannot afford to buy in extra feed. The Pasture First message is getting through; it’s the implementation that requires extra skill.”
The season has so far been pretty variable, Reid says. The weather hasn’t been favourable in the North Island, with rain during spring, while the South Island has had the opposite. But now this is reversing.
“The challenge now is for farmers to lock in the gains they have made in the last 18 months. Their confidence in the lift in the GDT should not be a reason for farmers to take their eye off the ball in terms of the pasture message.
“They should look closely at where their farm working expenses are going and capitalise on the efficiencies from a production perspective.”
Predicting weather is difficult; in hindsight farmers last year took the El Nino forecast too literally. Reid forsees an average summer.
When American retail giant Cosco came to audit Open Country Dairy’s new butter plant at the Waharoa site and give the green light to supply their American stores, they allowed themselves a week for the exercise.
Fonterra chair Peter McBride says the divestment of Mainland Group is their last significant asset sale and signals the end of structural changes.
Thirty years ago, as a young sharemilker, former Waikato farmer Snow Chubb realised he was bucking a trend when he started planting trees to provide shade for his cows, but he knew the animals would appreciate what he was doing.
Virtual fencing and herding systems supplier, Halter is welcoming a decision by the Victorian Government to allow farmers in the state to use the technology.
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
New Zealand’s national lamb crop for the 2025–26 season is estimated at 19.66 million head, a lift of one percent (or 188,000 more lambs) on last season, according to Beef + Lamb New Zealand’s (B+LNZ) latest Lamb Crop report.
President Donald Trump’s decision to impose tariffs on imports into the US is doing good things for global trade, according…
Seen a giant cheese roll rolling along Southland’s roads?