DairyNZ: Strong payouts offset high farm costs
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.
DairyNZ has released its ten policy priorities for the 2020 election and its report The View from the Cow Shed which provides policymakers with insights from the farm. Here’s chairman Jim van der Poel’s foreword from the report.
Together we have faced the unprecedented global pandemic of Covid-19, one of the worst droughts in living memory, and now a global financial downturn. For better or for worse, the New Zealand we knew just last year has fundamentally changed.
This election, DairyNZ has surveyed dairy farmers to better understand the issues impacting on their wellbeing. We have used this information to inform our policy platform and to identify the top 10 things the next government should do to improve outcomes for dairy farming families, their rural communities, and New Zealand.
As a sector we were grateful to be recognised as an essential service during lockdown which enabled us to continue our farming operations, look after our animals, keep people in the industry employed and help New Zealand’s exports.
We know not everyone was able to do so, and we really feel for those businesses and families who have been impacted through no fault of their own. Many of our farming families will be thinking back to the challenging seasons we faced in 2015 and 2016 when the farmgate milk price went from a record high to a record low, almost overnight.
We know times are tough but as a country we will get through this. We are all part of NZ Inc. and we all contribute to our collective wellbeing as a country. Covid-19 has reinforced this.
The year has been a difficult and challenging time not just for farmers, but for all New Zealanders.
The importance of having a diverse economy that can see us through the highs and the lows, whatever they may be.
Dairy has an important role to play in that recovery. We are New Zealand’s largest export sector and account for a third of total exports by value. We also support over 50,000 jobs – many of which are in the regions.
Our dairy farmers are world leaders in the production of sustainable, emission efficient and nutritious dairy, but we still have a significant farmer confidence and wellbeing issue in this country that pre-dates Covid-19.
Our research has shown us that an uncertain regulatory framework has been one of the main contributing causes. Farmers are operating in a challenging environment with changing regulations, uncertainties about staffing and a difficult financial outlook.
They are also facing changing weather patterns, high levels of debt and mental health issues. All of these factors impact on their wellbeing. Treasury’s Living Standards Framework views future wellbeing through the lens of four capitals: natural, social, human, and financial. Looking after intergenerational wellbeing means maintaining, nourishing, and growing each of these capitals. That is how we ensure our dairy sector and rural communities thrive for many decades to come.
Policy priorities
• Invest in R&D for our primary sector to unlock more value and volume.
• Set a clear strategy for science funding that is appropriately resourced to support farmers to reduce their environmental footprint while increasing profit.
• Work with the sector to meet workforce needs through training and recruitment of Kiwis, as well as skilled migrant workers.
• Invest in rural broadband and improved mobile coverage to better connect our rural communities with NZ and the world.
• Develop a national water storage strategy and invest in water storage to increase water supply in times of drought, enable land-use flexibility and unlock economic potential.
• Develop and enforce a world-leading biosecurity system that is properly resourced, learns from our M. bovis experience and ensures everyone plays their part.
• Reform the RMA to reduce compliance costs for farmers, increase efficiency and drive better environmental outcomes.
• Partner with farmers and support them to play their part to meet new environmental standards.
• Ensure targets for water quality improvements are fair and equitable, clear, scientifically robust and have pragmatic timeframes for implementation.
• Review the methane targets in the Zero Carbon Act to ensure they are firmly grounded in science and align our international and domestic targets.
