Farmers want policy certainty and are petrified about “kneejerk popular politics” similar to what the Government did with the oil and gas industry, says National agriculture spokesman Nathan Guy.
“This [payout drop] wasn’t particularly surprising as it reflects the ongoing volatility in the international dairy price, but clearly it will have a significant impact on the dairy industry,” Guy says.
“Times will be a bit tougher for dairy farmers over the next few months and it will have a flow-on impact in regional communities.”
However, Guy believes the low in dairy prices will be short-term. “The medium to long-term outlook for our dairy sector, and indeed all primary sectors, is very positive. It is expected to grow by 17% to more than $41 billion over the next four years.”
Guy says impressive growth in the meat, horticulture and seafood sectors will help to offset any decrease in the dairy industry.
“For example, beef prices for New Zealand farmers have risen to record highs and horticulture exports are now worth over $4 billion. The NZ dollar is also around 25 cents lower against the US dollar than this time last year, which is helping all exporters, and interest rates are low.”
Guy is adamant the dairy sector will bounce back. “Dairy farmers are resourceful and know better than anyone that it’s a cyclical business and always has been.”