Dairy Farmers to Use Information in Tougher Times

The country’s largest milk company Fonterra has just announced its forecast milk price payout for its farmers for the 2012/13 year at NZ$5.50 per kilogram of milksolids which compares to the current season expectation of NZ$6.05 per kilogram of milksolids.

DairyNZ CEO Tim Mackle says the long term outlook for dairy farming is still very bright however the immediate focus is how to manage through the short term with incomes reduced from last year.

“We’ve always been consistent with our messages to farmers about the volatility of international milk prices, which ultimately affect their incomes, and for them to ensure they have a farming system that is as resilient as possible to fluctuating prices,” he says.

“For many farmers this can often mean being extremely focused on costs, particularly the costs of using additional supplementary feed for cows to boost milk production,” says Dr Mackle.

He says there is a good understanding about why prices are falling for farmers which is largely due to a boost in milk production internationally, and in New Zealand, and economic uncertainty in Europe.

“Because farmers can’t control the price of milk, or interest payments in the short term, the action has to be around managing the cost of production. All farmers need to ensure they have a good budget in place and they are looking closely at what they are spending, including of course any variable farm costs,” he says.

Dr Mackle says DairyNZ’s provision of information around dairy farm management as well as its research aimed at greater farm profitability is crucial when times are tougher.

DairyNZ has planning and budgeting tools available on its website at www.dairynz.co.nz/financials and there is also valuable information to be gained by attending farm discussion groups with the sharing of experience and expertise. Many of these discussion groups are organised through DairyNZ farm consulting officers.

In addition, DairyNZ’s DairyBase database information should be another standard on going tool for farmers to ensure a focus on profitability. This tool can provide crucial information on wider farm management as well as well financial performance.