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.
The cost of running a New Zealand farm is now 27% higher than it was before Covid, putting sustained pressure on profitability acrfoss the sector, according to new ANZ research.
The finding comes from ANZ's latest Agri Insights report, which analysed the financial performance of more than 4000 dairy, red meat, kiwifruit, arable and pipfruit customers, comparing the 2020-24 period with the previous five years.
It found that while general inflation had stabilised in recent times, cost increases within the farming system have become structural, meaning farms now need to lift productivity just to stand still.
Lorraine Mapu, ANZ NZ's managing director of business and agri, said events playing out in the Middle East are a reminder that global uncertainty - from geopolitical tensions to fuel supply and input volatility - add another layer of complexity for farmers.
"While we're not currently receiving customer requests seeking specific support for issues linked to the conflict, we're staying close to our customers and remain focused on supporting them through any emerging challenges," Mapu says.
"What this research shows, though, is that the businesses best placed to navigate that uncertainty are the ones with strong fundamentals, good visibility over their costs, and the ability to keep investing in productivity through the cycle.
"Farming is now a higher-cost business than it was five years ago, and that's not something that unwinds when inflation cools.
"The standout performers aren't necessarily expanding or taking bigger risks - they're the ones who know their systems well, time their spending carefully, and keep finding small productivity gains year after year."
The report shows the gap between average farms and the top performers continues to widen, pointing to significant untapped productivity potential across the sector.
A safety push across New Zealand has revealed significant gaps in hazardous substances management, farm vehicles, tractors, quad bikes and side-by-sides.
New Zealand farmers have earned a global edge by consistently yet cautiously taking advantage of emerging agri-technology.
New season data from LIC shows a strong reproductive performance for the 2025-26 season, with a lift in key metrics compared to last season.
Xero, the global small business platform, today released its first ever small business productivity measurement backed by data from Xero Small Business Insights (XSBI).
Money invested to protect native bush, wetlands and other special habitats on farms is paying huge dividends.
A central Canterbury business which turns malting barley into a key ingredient in beer making has celebrated its 100% New Zealand-grown status with a special event.

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