Banking Advisor: Most dairy farmers don’t fully understand how banks assess credit
A leading financial and banking advisor says he doubts if most dairy farmers fully understand the dynamics of banking.
Beef + Lamb NZ and DairyNZ are working through the cost-sharing process for the industry share of eradicating Mycoplasma bovis, says BLNZ general manager policy and advocacy Dave Harrison.
“To come up with a fair approach we have been making use of an independent panel,” he told Dairy News in a joint statement from both industry-good bodies.
“We have had initial advice and are providing feedback. Once the process has finalised, a recommendation will go to our respective boards and be shared with farmers.
“Given this is a sensitive and important process, we can’t comment on the specifics until it has been agreed and approved by our respective boards.”
The cost of the eradication programme is reckoned at $886 million over 10 years. MPI says $16m of that is loss of production and will be borne by farmers, while $870m is the cost of the response, including compensation.
The Government will pay 68% of that and the two levying bodies, DairyNZ and BLNZ, will pay 32% (about $278m).
But exactly how it will be split between them remains under discussion. Earlier this year dairy industry sources said an 80/20 split between dairy farmers and beef farmers would be fair. However, beef farmers were pushing for a 90/10 split, pointing out that dairy farms are at the centre of the outbreak.
Questions are being raised about just how good the state of the dairy industry is - especially given that the average farmgate payout for the coming season is set to exceed $10/kgMS.
A leading financial and banking advisor says he doubts if most dairy farmers fully understand the dynamics of banking.
Dairy farmers are shoring up their balance sheets, with almost $1.7 billion of debt repaid in the six months to March 2025.
Virtual fencing company Halter is going global but for founder Craig Piggott, New Zealand farmers will always remain their main partners.
A former Fonterra executive is the new chair of the Dairy Companies Association of New Zealand (DCANZ).
New Federated Farmers national dairy chair Karl Dean is looking forward to tackling the issues facing the sector.
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