Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
He says one of these is the Emission Trading Scheme (ETS), which is saying that agriculture will be a part of this scheme come 1 January 2025. Van der Poel says they want this legislation changed to take that pressure off farmers and so DairyNZ can work constructively on what NZ contribution will look like.
“We are keen to have a constructive discussion with the new government on that,” he says.
Van der Poel says his organisation wants a change to the immigration settings which don’t work well for the dairy sector. He says the present freshwater reforms are also a big problem and says a lot of pressure is on regional councils to get these done by the end of next year.
“Already we can see that councils are under so much pressure from a timeline point of view, and this is an issue.
“There is the potential risk that in their haste to get these completed, some of their decisions won’t necessarily be science based and in the end may have to be relitigated in the future. We are seeking to get a longer time frame so that we’ll end up with better plans,” he says.
DairyNZ says it fully supports the commitment of the incoming government to abolish the present RMA. But van der Poel says DairyNZ would like to get a headsup on what the replacement legislation might look like and to have a constructive discussion with the incoming government on the shape of any new law.
With NZ signing the Paris Accord, van der Poel says we have to meet certain obligations, but DNZ want to be sure they will end up with things that they agreed to in the past. He says they want the ETS expanded to include other forms of vegetation that are sequestering carbon. He also says farmers need to know their number at a farm level; once they get that, there will be behavioural change.
The other issue that remains uncertain for farmers is the outcome of the Climate Change Commissions review of targets. Van der Poel says getting clarity on that would be good so that farmers know what’s ahead of them.
In the meantime, it’s a case of waiting for a new government to be formed, portfolios allocated and then ministers getting briefings from their departments and industry organisations such as DairyNZ.
