On-farm inflation is at its highest level in almost 40 years, according to Beef + Lamb NZ’s Economic Service, and costs are expected to increase. Meanwhile Federated Farmers says farmers’ satisfaction with their banks is relatively stable but more are feeling under pressure and the costs of finance are rising.
“Inflation is putting many New Zealanders and businesses under pressure, and our food producers are no different,” Feds President and economic spokesperson Andrew Hoggard says.
While Consumer Price Index (CPI) data has the annual inflation rate at 6.9%, the latest on-farm inflation rate has hit 10.2% – the highest it’s been since 1985-86 (13.2%).
B+LNZ is concerned increasing regulatory requirements from the Government, such as freshwater and biodiversity rules, will stretch farmers even further. Continue reading “Why this is not the time for govt to be heaping regulatory costs on farmers and requiring a culling of the dairy herd”
The dairy industry has recovered some of its confidence, as its role as the backbone of NZ’s export structure has moved into sharper relief in the Covid-19 pandemic.
Rabobank’s latest quarterly survey of farmer confidence says it has improved from minus 32% to minus 23%, with demand for NZ dairy products holding up well since the previous survey in September.
The dairy industry over past seasons has been the target of urban critics for so-called “dirty dairying”, climate change warriors who want a reduction in methane emissions, and the government, which is implementing new freshwater regulations. Internally the industry was stricken with the financial woes of Fonterra.
Even now as the industry absorbs the evidence for greater confidence, it is not without strategic concerns. Most of these are focused on its Chinese markets following the problems being encountered by Australian exporters in the wake of retaliatory action by the Chinese government. Continue reading “Dairy farmer confidence is improving but there are challenges in export markets”
Rabobank’s latest survey of farmer confidence found dairy farmers more upbeat about the fortunes of the agricultural economy than meat and wool producers. Dairy farmer net confidence rose to -29% (-33% previously).
Improving demand is the key reason for optimism among dairy farmers. That’s largely because global demand for dairy has held up well during the course of Covid-19 with many consumers opting for simple, familiar, stable food products such as dairy during the pandemic. And since the last survey, Fonterra has lifted the lower bound of its farmgate milk price pay-out range for the 20/21 season.
Then there is Fonterra’s performance under the stewardship of Fonterra chief executive Miles Hurrell, who has succeeded in turning the co-op’s fortunes around after two grim years.
Now, as the global economy stumbles into a pandemic-induced recession, the dairy industry more than ever has become the main prop in sustaining NZ’s export capacity.
The question is whether Fonterra – as the major player in the industry – can accelerate the progress it has recorded under Hurrell’s leadership. Continue reading “Decarbonisation is one option for Fonterra bosses to consider as they strive to make the co-op a national champion”