ANZ Warns of Milk Price Risks as New Dairy Season Begins
The new dairy season is kicking off with plenty of risks to the forecast farmgate price, both upside and downside, says ANZ agricultural economist Matt Dilly.
ANZ has announced an assistance package for farmers affected by extreme dry conditions across much of New Zealand’s east coast.
Many areas, including Canterbury, have experienced "severely dry" conditions over the past two months compared with the long-term average, according to NIWA.
“The Big Dry is affecting areas which haven’t experienced extreme conditions like these for many years, so for a lot of farmers this is new territory,” says Graham Turley, ANZ Bank’s managing director commercial & agri.
“We recognise the challenges and anxiety this is creating for farmers, which have been exacerbated by forecast low dairy payouts. We’re offering targeted assistance, recognising that the situation may require more complex solutions for some.”
The options available to affected farmers through ANZ are:
· Suspending loan principal repayments
· Waiving fees associated with restructuring business loans considered necessary due to impacts of extreme weather
· Waiving fees for term finance and investments, which improve performance and the ability to respond to climatic variation in future years
· Waiving the interest rate reductions associated with accessing funds on term deposits ahead of maturity date
· Providing access to discounted short-term funding to help farmers get through the immediate challenges while also protecting their long-term productivity
ANZ is encouraging farmers to act early and engage advisors to develop a plan, including working with accountants to produce cash forecasts and consulting with banks on funding requirements.
“The impacts of drought are not just financial. We also appreciate the stress created for some customers and encourage them to communicate regularly with their family, advisors and support networks,” says Turley.
Tayla Steele is in her fourth year of a Bachelor of Veterinary Science at Massey University in Palmerston North.
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