Friday, March 29, 2024

Dairy incomes set to drop

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The incomes of farmers in the dairying heartlands of Waikato, Taranaki, and Canterbury are estimated to drop more than $600 million this season with Fonterra’s latest milk price downgrade, DairyNZ says.
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Based on last season’s production, DairyNZ estimated the Waikato region would face an earnings drop nudging $294m, Taranaki $111.3m and Canterbury $213.8m.

The total drop in income to New Zealand dairy farmers this season is estimated to be $1.1 billion.

Industry heavyweight Fonterra has cut its forecast milk price from $6/kg to $5.30.

Other dairy processors have also slashed their forecasts as world dairy prices continue to soften.

DairyNZ said its estimates were based on multiplying last season’s regional production by a 60c/kg drop in forecast milk price to show loss of income. The industry improvement organisation said it used 60c instead of the actual 70c milk price fall, because the net loss was really 60c as the dividend forecast was improved.

The income comparison was not with last year’s milk price, but a calculation of lost income from the latest forecast downgrade.

Southland farmers’ income is estimated to fall by $132.4m, Northland $60.5m, Bay of Plenty $75.8m, Hawke’s Bay $9.5m, Manawatu $49.9m, Wairarapa-Tararua $36.6m, Nelson-Marlborough $6.5m, West Coast-Tasman $45.8m, Otago $56.1m.

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