Wednesday, 03 April 2024 10:55

Editorial: On the mend

Written by  Staff Reporters
According to DairyNZ's latest forecast data, the outlook for the current season has been imrpoved. According to DairyNZ's latest forecast data, the outlook for the current season has been imrpoved.

OPINION: DairyNZ's latest forecast data on the Econ Tracker, that the outlook for the current season has improved, will be welcome news for farmers.

Only six months ago, the outlook was dire for many farms, with soaring input costs and a very average milk payout.

In recent months, dairy prices on Global Dairy Trade have risen, although the last two GDT events have seen prices retreat slightly.

DairyNZ says revenue projections have improved largely due to better results at the global dairy auction, along with Fonterra’s adjusted projected payout for the season, now sitting at a mid-point of $7.80/kgMS.

The Econ Tracker notes significant price decreases for feed and fertiliser, bringing these more in line with historical averages, reducing on-farm costs.

But interest rates remain high, becoming one of the most significant costs for farmers this season. The Reserve Bank signalled slowed reductions to the official cash rate, meaning interest rates are now likely to reduce more slowly and later than previously expected, which will concern farmers, many of whom are on floating rates.

When considering these changes, DairyNZ’s latest forecast data on the Econ Tracker shows the national breakeven forecast currently sits at $7.75/kgMS. This is below DairyNZ’s forecast average payout received of $8.12/kgMS, which is based on the estimated milk receipts for the 2023-24 season and dairy company dividends for all processors.

With less than two months left for the season, farmers will be turning their eyes to the next season and the forecast from Econ Tracker isn’t very good.

The breakeven milk price for the 2024/25 season is forecast to sit at around $7.76/ kgMS, while the forecast payout received is $7.79/kgMS.

The message for farmers is to continue managing their budgets and costs.

Farmers will be hoping for a payout higher than Econ Tracker’s forecast of $7.79/kgMS.

More like this

Strong uptake of good wintering practices

DairyNZ has seen a significant increase in the number of farmers improving their wintering practices, which results in a higher standard of animal care and environmental protection.

Better animal genetic gain system

A governance group has been formed, following extensive sector consultation, to implement the recommendations from the Industry Working Group's (IWG) final report and is said to be forming a 'road map' for improving New Zealand's animal genetic gain system.

Editorial: Keep FTAs coming

OPINION: The dairy industry will  be a major beneficiary of a new free trade deal between NZ and the Gulf Co-operation Council (GCC).

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of a major software project.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of…

Machinery & Products

BA Pumps expand

Cambridge based BA Pumps & Sprayers, specialists in New Zealand-made spraying equipment, has acquired Tokoroa Engineering’s product range, including the…

Entries open for innovation award

Fieldays and its renowned Innovation Awards are celebrating their 57th year, marking a longstanding tradition in the agricultural calendar, with…

» Latest Print Issues Online

Milking It

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Not fair

OPINION: The Listener's latest piece on winter grazing among Southland dairy farmers leaves much to be desired.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter