The New Zealand dairy industry is expecting a ''boom'' this
year, and while the country's dairy income and production
could be record-setting, DairyNZ chief executive Dr Tim
Mackle cautions farmers about being tempted to loosen their
He said good milk prices and high production meant it could
be a great year, but the industry's optimism needed to be
tempered with the fact there was a still a lot of hard work
The industry expects production to be about 7% higher than
last year, Fonterra's forecasted 2013/14 payout to farmers is
$8.30 per kg of milk solids, which is the highest it has
been, and dairy prices are reported to be more than 50%
higher than they were a year ago.
Dr Mackle said he was optimistic that milk returns would
''boom'' for New Zealand, particularly with ''several billion
dollars looking [like] coming into the country''.
The demand for fresh, local dairy product was particularly
strong, compared to powder in bags.
''We have some really good production figures [this season],
touch wood, and most regions are well ahead,'' Dr Mackle
''Let's keep our feet on the ground and make sure we maintain
our cost structure and be resilient in case of soft prices
and weather events.
''When we get a good year, then sometimes the belt gets
loosened, but then the costs go up and vendors want more, so
we have got to be careful and we don't know what is around
''We keep hearing [price] volatility is here to stay, so we
have got to be on our toes.
''Farmers often say it takes two to three years to recover
from a good year.''
Dr Mackle said there was some hard work still to be done
around land and water regional planning as part of the
National Policy Statement for Freshwater Management
requirements for regional councils in all the main dairying
They wanted to ensure policies addressed issues with other
land users, included those who were urban-based and who also
contributed to the nutrient waste.
He said DairyNZ and Federated Farmers would be devoting a lot
of resources to ensure a good outcome. The industry would
also continue to focus on nutrient and effluent planning and
Encouraging more young people, particularly those with
degrees and diplomas, into the industry, including on-farm,
and in the science and consultancy sectors, was another
He said the demand for good labour would increase as the
economy started to pick up in the next two to three years and
to farm better, more profitably and more sustainably required
greater skill levels.
''The demand for labour from Australia is tapering off and
that is one positive for us.''
The general perception about the way we farm and the way we
looked after our animals was the subject of ''great interest
from the public and consumers''.
New Zealand needed to keep an eye on new on-farm technologies
as well as its overseas market competitors, including
Ireland, which was looking at entering the Asian market for
dairy supply, as well as on the United States, which now had
more corn available to feed its dairy cows and was one of New
Zealand's main competitors.
''Other people want to play in our sandbox.''
Greenhouse gas emission mitigation (GHG) was another issue
that DairyNZ had invested resources in.
Another eye had to be kept on what other governments were
doing towards regulation and GHG targets.
However, as other countries had not included agriculture in
their GHG mitigation strategies, he could not see any
advantage to New Zealand including it.
- by Yvonne O'Hara