Friday, 28 October 2016 10:38

Positive steps in most challenging season in a decade

Written by 
DairyNZ chief executive Tim Mackle. DairyNZ chief executive Tim Mackle.

Figures released at DairyNZ annual general meeting (AGM) in Ashburton shows the 2015/16 dairy season was the most challenging year yet for dairy farmers.

The 2015/16 milk price of $3.90/kgMS was the lowest in more than a decade and impacted farmers who last season were, on average, operating at a break-even cost of $5.25/kg milksolids.

DairyNZ board chair Michael Spaans says despite an obvious shortfall in farm income, last season farmers made positive steps in reducing 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/kg milksolids for 2016/17,” says Spaans, speaking to an audience in Ashburton.

“This is a rare positive from a period of low milk prices and something farmers should be immensely proud of. Farmers’ abilities to sharpen the pencil and remain focused is 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 $8 billion in 2015/16.

The industry’s milk production benefited the New Zealand economy by $12.2 billion 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 makes a range of industry investments through the $67 million levy, plus additional government and commercial funding.

“Investing farmers’ money into 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 such areas as research, environmental management and our workforce.”

This coming year, $16m will be invested into each of the three key areas – research; farm profit; biosecurity and product integrity. Environmental work will also receive $12m funding.

More like this

Musical chairs

OPINION: DairyNZ's director elections has seen scientist Jacqueline Rowarth re-elected for another three-year term.

DairyNZ levy to increase?

Retiring chair Jim van der Poel has used his final AGM to announce the intention to increase the DairyNZ farmer levy for the first time in the industry-good body's 17-year history.

Tributes to retiring 'Jim the farmer'

Doing what is right, not what is easy, has been the hallmark of Jim van der Poel's leadership of, and advocacy for, the dairy industry, attendees at the DairyNZ annual general meeting heard last week.

Featured

New ag degrees at Massey

Changing skill demands and new job opportunities in the primary sector have prompted Massey University to create a new degree course and add a significant major into another in 2025.

The show is on!

It was bringing in a new Canterbury A&P Association (CAPA) show board, more in tune with the CAPA general committee, that has ensured that Christchurch will have a show this year, says CAPA general committee president Bryce Murray.

National

'Quite a journey'

Former Synlait chief executive Grant Watson says the past two years have been quite the journey.

DairyNZ levy to increase?

Retiring chair Jim van der Poel has used his final AGM to announce the intention to increase the DairyNZ farmer…

Former Fonterra CEO dies

Former Fonterra chief executive Theo Spierings passed away in the Netherlands over the weekend.

Machinery & Products

Milk Sustainability Centre launched

The recently announced Milk Sustainability Centre – a collaboration between global giant John Deere and milking and feed specialists De…

Data connection made easier

New Holland and Case IH are introducing new advancements in their precision technology stack to make farming easier and more…

» Latest Print Issues Online

Milking It

Feed from farmers

OPINION: The country's dairy farmers will now also have a hand in providing free lunch for schools.

Brighter future

OPINION: The abrupt departure of Synlait chief executive Grant Watson could be a sign that Chinese company Bright Dairy, the…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter