Dairy Production: 10% response to payout

Lower North Island milk production to date is running close to 10% down on the previous season. While part of this could be attributed to climate, the majority is likely to be the on-farm response to low milk prices. In my opinion this is an entirely sensible response – why produce more milk below cost than is really necessary?  With the rest of the world dairy exporters/producers facing the same price pressure, we could expect to see the same milk production trend emerging world-wide, and a resultant positive shift in price.

If milk price does shift above $6:00/kgMS , given the nature of our farming systems, it will be relatively easy for most NZ farmers to take advantage either later this season or for 2016/17.

Fonterra Lower North Island Milk Graph to mid-November

Fonterra Lower North Island Milk Graph to mid-November

About Richard Anderson

Mobile 027 543 1610
Office 06 323 3363
Home 06 323 1390

Email: richarda@ruralandlifestylesales.com

Richard has extensive experience in rural New Zealand and several overseas rural markets. Originally from the South Island, he lived and travelled overseas working for an Agri-Tech company and eventually settled in the Manawatu. Richard entered the real estate industry in 1995. From 2000-2010 he was Rural Manager for a large real estate company, supervising up to 40 real estate salespersons.

Richard is a jet boat enthusiast, and is on the national executive of Jet Boating NZ.