The ''tightest and roughest'' times are still to come for dairy farmers, Federated Farmers dairy chairman Andrew Hoggard believes.
In his address to the dairy council at Federated Farmers' national conference in Wellington yesterday, Mr Hoggard said the industry had experienced its own ''annus horribilis'' and the effects of the past year would continue to be felt in the coming year.
While much of the focus for the past season had been on Fonterra's performance, he believed some of that focus was misguided.
Some believed the GlobalDairyTrade auction was the cause but it was ''simply the messenger'' and provided transparency for dairy farmers.
It had also been suggested that Trading Among Farmers (Taf) was to ''blame for everything that is going wrong'' but Mr Hoggard did not agree, saying Taf's purpose was to sort out redemption risk and it was succeeding in doing that.
Blaming Taf came down to some confusion between Fonterra's strategy and its structure, he believed.
Fonterra's share of milk processed in New Zealand had fallen but, in pure quantity, it was processing more milk than ever.
The concern was that if milk production was to plateau and Fonterra was to continue to lose market share, then it could run the risk of processing less milk, which could cause operational inefficiencies and would lead to Fonterra struggling to pay a competitive milk price.
Taf did not cause the Chinese to overpurchase, generally good growing conditions globally, or the ban of import of European dairy products into Russia. People were also ''pointing the finger'' at the Dairy Industry Restructuring Act which was ''miles off base'', Mr Hoggard said.
Issues that should be focused on were communication within Fonterra, from the board down to farmer shareholders and vice-versa, some key financial indicators, and staff retention and morale.
He did not believe that seemingly continual restructuring was good for any company.
''At times, you just need some `steady as she goes' for people to be embedded in their roles,'' he said.
The biggest issue facing dairy farmers was nitrogen caps and how that nitrogen was allocated. While there were calls for moratoriums on dairy conversions, he believed the priority needed to be agreeing on acceptable water quality standards for the various catchments, and then devising a fair and equitable allocation regime across all sectors.
