“Every farm is different but, given the scale of cost increases in the past few seasons, many farms will be feeling the current profit squeeze,” explains DairyNZ chief executive Dr Tim Mackle.
“They will likely be starting the season with inflation, farm costs and milk prices front of mind, and considering how to approach the year ahead.”
DairyNZ’s data has shown that, on average, farm costs increased by around 13% between the past two seasons (2021/22 and 2022/23) and around 33% over the past three years. However, costs are forecast to reduce from around $9.17 kg/MS last season to around $8.96 kg/MS for the 2023/24 season.
“It is good to be seeing a slight reduction in farm expenses, particularly for urea and supplementary feed, but costs are still high. We are hearing from farmers that on-farm inflation is one of the biggest concerns impacting their profitability, as they have experienced significant price increases in the past year,” says Dr Mackle.
“That’s why we are focused on supporting our farmers through current market conditions. We are excited to launch our new DairyNZ Econ Tracker to farmers, which provides some of the latest information on the New Zealand dairy sector, including farm economics.
“This is a central platform where farmers can gain information to help understand their operating environment, track sector trends, and then apply the information to their individual farm businesses.
The DairyNZ Econ Tracker builds on the available information from the DairyNZ Economic Survey and Dairy Statistics and provides a snapshot of the dairy sector’s economic situation.
Information will include forecasts applying regional and national average data, providing useful trends to observe for farmers to consider the application to their individual farms.
“Farmers can use this data to help look for trends and understand the current economic environment, including what is happening now and what may happen in the near future, to support their budgeting and farm business planning.”
Context and information provided from the Econ Tracker will help farmers prepare for different scenarios in the seasons ahead, while DairyNZ have also been working with farmers nationwide to understand what they are doing to farm through the current economic environment.
Farmers’ top tips include surrounding yourself with people who understand farming and its outlook, having a strong support team and ensuring young stock have the best possible start. These tips and more are available on DairyNZ’s website.
“The start of the season also provides a great time to make a budget and consider how to manage costs. This includes identifying the must-haves and the nice to haves, while being careful not to cut costs that will have long-term effects on profit, or the wellbeing of your people or animals,” says Dr Mackle.
“Our sector has been here before and made it through, while continuing to contribute to our local communities and the New Zealand economy. With the right approach, we can get through this as well.”
Farmers wanting support are encouraged to reach out to their peers, rural professionals and their DairyNZ regional team or go online to dairynz.co.nz/budgeting for more information.
The new DairyNZ Econ Tracker is available online at dairynz.co.nz/econtracker.
Join DairyNZ at the Fieldays, to find out more about the new DairyNZ Econ Tracker, along with a range of other practical tools and resources, while also providing the opportunity to talk to our scientists and DairyNZ staff on site.
Visit the DairyNZ team in the Pavilion at site PC44, 46, 48 at Mystery Creek from Wednesday 14 June to Saturday 17 June.
Senior media specialist
p 027 808 0673