increase font size
The grass-fed model has greater consumer appeal and in some ways this latest blip may yet prove to be the saviour of the dairy industry – not its demise.
While Fonterra seems to be putting a brave and optimistic face on the economic headwinds facing the dairy industry, the cooperative's optimism and the bare facts don't seem to align.
The reality is most other commentators don't share this optimism and the fact that Open Country has dropped 30c off its pay-out forecast tends to back that up.
In terms of real credibility the views of Ian Proudfoot, the global head of agribusiness for KPMG who is probably the most clued up commentator in NZ, have to be taken seriously. He has his finger on the pulse internationally and understands the economic and political dynamics better than most.
Back in the 1970s and 80s we had what were called 'milk lakes' in Europe as EU subsidies encouraged farmers to produce more milk than consumers wanted.
Price to farmers was the driver and in a sense history is now repeating itself. Farmers worldwide generally regard success as how much they produce and how many animals they run on their farms.
Go to any DairyNZ field days and the question of profitability is seldom discussed.
New Zealand along with 124 other countries regard China as their major market and let's be frank, the Chinese economy is a bit of shambles. Their stock exchange is a mess and the valuation of some companies is bordering on fantasy.
The result is that growth has slowed and with it consumption of food exports such as milk powders. To add to the woes the European economy is not that flash either.
This is not the global financial crisis of a few years ago, but it's not a wound that is going to be healed overnight. It is hard to argue with the view of Proudfoot that there is at least another 18 months of low prices ahead for the dairy industry.
But even when this is over, don't expect an instant recovery. We know that when a severe weather event is over, it can take years for things to get back to whatever normal might be and the dairy boom and bust will be the same.
It is important to be positive. There is a sense that dairy farmers are recalibrating their businesses and developing much more sustainable models based on near all grass-fed animals.
The grass-fed model has greater consumer appeal and in some ways this latest blip may yet prove to be the saviour of the dairy industry – not its demise.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.
The dairy sector is in a relatively stable position, with strong milk price payout forecasts continuing to offset ongoing high farm costs, according to DairyNZ.
OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.
Fonterra has delivered a fifth straight year of record organic milk price for farmer suppliers.
Like many manufacturers around the world, European agricultural machinery and tractor manufacturers are currently operating in a difficult market environment. But they are heading to the world’s largest agricultural machinery event in Hanover next month with a degree of cautious optimism.
Established in 2021, the John Deere Technician of the Year Awards champion the important contribution parts and service technicians make to the Australian and New Zealand agriculture, construction and forestry industries.
Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.
New Zealand is closer to eradicating bovine TB than ever before, but possums remain a threat, says Beef + Lamb New Zealand.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.
OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…
