9 Jul 2015

Most dairy farmers will run at loss this season

9:14 am on 9 July 2015

The national dairy industry body says at current forecast milk prices, in Fonterra's case $5.25 a kilo, most dairy farms will run at a loss this season.

To help them survive that, DairyNZ is providing a new service that they can tap into.

Farmers can go on-line and check out detailed budgeting information from top performing farms, which have pared back their production costs to below $3.50 a kilo of milk solids.

DairyNZ's research and development head, David McCall, says as things stand the average dairy farmer will lose $150,000 to $200,000 this season if they don't make changes.

"And we're trying to ensure that we minimise that loss so that they don't build up extra debt, which is just going to burden them in the years to come.

"We are running a Tight Times campaign for farmers to help them get through this in the best possible shape and be able to bounce back quicker.

"In doing that, we're providing them with some practical, relevant advice and one of the ways that we're trying to do that is, not only to describe the bench marks for how much top farmers are spending on various items, but also show farmers what they're spending money on, and by omission, what they're not."

David McCall said if farmers could reduce their potential loss by up to a dollar a kilo this season, they could recover from the low milk price three to four years faster.