increase font size
Northland regional Federated Farmers dairy chair Matt Long says a record milk price this season would be a huge psychological boost for local dairy farmers.
A record milk price this season would be a huge psychological boost for Northland farmers, says the region's Federated Farmers dairy chair Matt Long.
He expects farmers to use the extra income to reduce debt and improve the environmental footprints of their business.
"I also expectsome to spend on productivity improvements and some well-earned spending on things to improve their lifestyle," Long told Rural News.
"The forecast payout is very positive, but necessary given soaring inflation of input costs."
Long points out that soaring costs and worker shortages remain the biggest challenges facing local farmers, who endured a severe drought in the previous two seasons.
Fonterra's latest milk price forecast for the season is in the range of $8.90 to $9.50/kgMS, with a mid-point of $9.20/kgMS.
For Northland, based on milk production of around 81 million kgMS at $9.20 payout would pump nearly $750 million into the region's economy.
BNZ economist Doug Steel notes that dairy prices have started the New Year in fine form, pushing higher from the already elevated levels reached in 2021.
"Prices are 28% above a year ago, nearly 38% higher than their 5-year average, and at their highest level since 2014," notes Steel.
An expected 4% drop in NZ milk production is one of the factors keeping the milk price at record levels.
"While there is some rain in the near-term forecast, we expect NZ milk production to remain below last year's strong late season outcomes over coming months such that the full season will be down in the order of 4% or more," he says. Milk production in key overseas markets - the US and Europe - is also spluttering. Tighter supply is also pushing prices up.
But Steel says there are some downward risks as well - China's growth could be slower than anticipated and Omicron is still looming large around the globe.
But for now, at least, milk price prospects are strong.
"For farmers facing such things as variable weather, higher costs, rising interest rates, proposed options to price agricultural emissions, an exceptionally tight labour market, and the possibility of significant disruption from Omicron circulating in the community - it is good to take one thing off the worry list."
Having been hit by a severe drought over the previous two seasons, Northland's milk production is tracking well.
Long says Northland's climate is highly variable.
"I think after a difficult start to the season most farms will be having at least average production," he says.
However, like most other growers, they are also facing soaring input costs.
On his farm at Matapouri, eastern Whangarei Long milks 200 cows and hopes to supply 65,000 kgMS this season.
"We are rebuilding after two years of quite intense drought," he says.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.
OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.
Fonterra has delivered a fifth straight year of record organic milk price for farmer suppliers.
Fonterra says favourable weather conditions supporting pasture growth is boosting milk production.
Like many manufacturers around the world, European agricultural machinery and tractor manufacturers are currently operating in a difficult market environment. But they are heading to the world’s largest agricultural machinery event in Hanover next month with a degree of cautious optimism.
Established in 2021, the John Deere Technician of the Year Awards champion the important contribution parts and service technicians make to the Australian and New Zealand agriculture, construction and forestry industries.
Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.
New Zealand is closer to eradicating bovine TB than ever before, but possums remain a threat, says Beef + Lamb New Zealand.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
OPINION: Ageing lefty Chris Trotter reckons that the decision to delay recognition of Palestinian statehood is more than just a fit…
OPINION: A mate of yours truly recently met someone at a BBQ who works at a big consulting firm who spent…
