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.
The payout has come as a shock to a lot people and farmers are now challenging their own farming systems, he says.
Anecdotally they don’t appear to be changing from one system to another, but rather are looking at refining and cutting costs in their existing systems.
“People are destocking or making sure they are not carrying passenger cows through this current season.
“They are making best use of home grown feed instead of buying supplements. And they are looking at all farm inputs.”
Reid says many farmers have been through tough times before and they are now hunkering down to ride out the storm of low prices.
Many farmers got rid of passenger cows in the late spring in anticipation of a tight season, reducing reliance on supplementary feed.
But Reid says the cold wet winter has been a problem in many areas so the use of supplementary feed is going to be a focal point over spring.
The prospect of El Nino raises issues for farmers, he says. Southland farmers are already talking about growing fodder beet to take them through next winter.
