DairyNZ levy to take a hit

The industry-good organisation had budgeted for a 2% increase in milk production, in line with milk processor forecasts, on June 1 last year.

However, the low payout forced milk production to drop 3% below last season's yield.

DairyNZ chairman Michael Spaans says based on last year's total income of $60 million, it was bracing for a $3m shortfall.

He told Rural News that DairyNZ has cut back on some projects planned over the next five year but is maintaining a focus on long-term research and science objectives.

Spaans says DairyNZ will also dip into a surplus fund built up over the past years.

DairyNZ has also shifted some resources on-farm to help farmers survive two consecutive seasons of low milk prices.

Spaans says DairyNZ is also tightening its belt and working hard to deliver more immediate help to farmers.

"As a board we think very carefully and strategically how to best invest levy money on behalf of farmers.

"A key focus for our board is to ensure we are getting the most out of those investments, while as you will be aware New Zealand has produced a lot more over the previous five years. That growth now appears on hold, so we need to trim our budgets to reflect less levy income coming in during the next few years."

Farming has become complex but the need to be competitive as well as farm responsibly remains its firm focus, he adds.

Challenges include dealing with more extreme market volatility, farming within environmental limits, consumer expectations and how we farm responsibly, in particular animal welfare standards.

"At the same time, we need to look at these as opportunities where we can position 'NZ dairy' as a producer of high-quality safe dairy products," says Spaans.

"We need a strong story for our customers – but we also know they will judge us on actions, not words. We need to be living our story as an industry – and making it real for people."

He referred to the Sustainable Dairying: Water Accord; a report released earlier this month shows that despite tough seasons, dairy farmers have stepped up and made significant progress on meeting their environmental commitments.

Dairy farmers are leading the way in keeping stock out of waterways and in effluent upgrades, with $1 billion spent over the past five years.

Under the Accord, 96% of dairy cattle have been fenced off from waterways on farms, equalling 25,656km of waterways excluded from dairy cattle.

Spaans says the Water Accord is just one of a number of ways to measure progress as an industry, in a transparent manner. "It is part of how we are driving continual self-improvement across the industry."

Farmer help available 

DairyNZ launched its Tactics campaign early last year, offering following practical help to farmers:

• nine top performing farmers sharing their budgets

• 29 Tactics farmers - sharing their stories and hosting events

• 800+ farmers had a feed review visit last Spring

• plus a range of tools, resources and events were offered.