Exciting, challenging season ahead

Published date24 May 2023
Publication titleStratford Press
We know we’ve faced a range of challenges — increasing regulation, disease outbreaks, natural disasters, staffing challenges, milk price volatility and, more recently, inflation (like all New Zealanders)

But we are also brilliant food producers and truly committed businesspeople.

I am always proud of how our sector produces high-quality nutrition for customers here and around the world, even amid volatility.

Last year dairy exports continued to increase, hitting new highs of $22billion in the year ended June 2022. This resulted in about $50b to New Zealand’s economy.

This was while we saw disruption at an international level, including the Covid-19 pandemic, the invasion of Ukraine, spiralling inflation rates and heatwaves in Europe and Asia.

Global dairy markets fared relatively well, supporting strong export returns, but recently there has been some softening in price for some dairy products that is being reflected in milk price for the current season. Farmers are adaptable and used to milk price fluctuations, and I have seen many highs and lows over the years. This season the expected milk price remains high compared with the average 20-year milk price of $7.51 per kg/MS (when considering inflation).

But really, the issue isn’t the milk price. It’s the increasing costs our farmers face to run their businesses and homes, while continuing to service debt.

A couple of years ago, if someone had said we’d have an $8-plus milk price and farmers would struggle to profit, we wouldn’t have believed it. Now that scenario rings true, as farm cost forecasts have increased about 11 per cent to about $9 per kg/MS in 2022-23, putting pressure on cash surplus for many.

With this in mind, we know our best operators are thinking about how they will manage and are cutting costs. We encourage all farmers to proactively seek support from their peers, rural professionals and their DairyNZ regional team, so they are well prepared for this season.

Science solutions Science and innovation help drive us forward and DairyNZ will continue its focus on complex problems, harnessing science for on-the-ground solutions.

I’ve been proud to be part of terrific R&D projects at DairyNZ, too many to list. More recently, the successful...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT