Dairy prices: ‘Weathering the storm’

Hayley Moynihan, Rabobank

Following Fonterra’s cut to forecast milk payouts by 25 cents a kilo one bank is urging farmers to ‘weather the storm’.

Rabobank’s country banking general manager Hayley Moynihan told On The Land’s Rob Cope-Willams that Tuesday’s announcement of $3.90 a kilo wasn’t unexpected as there was downward pressure on the milk price, and that we’re back to where we were in August last year, when the forecast was $3.85.

“There’s been a little window of optimism in between (from $4.15), but this will see farmers back to relooking at their budgets again and seeing what their cashflow looks like over the next 12-18 months,” Moynihan says.

She says one of the problems is this generation of farmers may not have experienced the downturn that older farmers might remember during the 1980s, and the early part of the 1990s, which was extremely tough, and New Zealand came out of that having learnt a great deal as a result.

“We’re facing a similar challenge now and I’d encourage that people do look at what we come out the other side looking like – which is that we can be more efficient and we can be more competitive and perhaps a bit tougher out the other side, then I think we might have weathered the storm really well,” Moynihan says.

She says it’s important to acknowledge these are tough conditions, and there’s a fair amount of stress out there, and encourages farmers to look at the resources available. 

“We’ve seen some great work, in the last 6-12 months, in particular, from DairyNZ and organisations like Rural Support Trust, to put together tools and discussion points that people can use in their businesses and encourage them to have that discussion with their professional advisors, with family and friends where necessary to look at what options might be out there. It’s often difficult when you’re looking at your own business to really understand what other people might be doing and starting to think creatively.”

“Sweeping it under the carpet can be the worst thing, in terms of isolation that brings, but also not being able to move forward, so we do encourage those to keep talking to those out there and reach out to neighbours and others in the community because everyone is in the same boat, pretty much and there are some good resources and good experiences from past downturns that we can learn from.”

See the full interview – On The Land, FaceTV (Sky Channel 83) this Sunday 13 March, 8pm.

 

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