NEW ZEALAND - Industry body DairyNZ says New Zealand dairy farmers have sharpened their systems and reduced costs through this sustained low milk price period.
DairyNZ chief executive Tim Mackle said while the milk price will continue to keep pressure on farmers this season, the industry’s performance in cost-cutting on-farm means break-even costs have been reduced.
“We’ve revised our break-even milk income required for the average farmer in 2016/17 to $5.05 per kg Milk Solids (MS),” said Mr Mackle. “It was $5.25 per kg MS for 2015/16 and $5.77 in 2014/15.
“The reduced milk price has meant farmers have really fine-tuned their management and analysed their costs of production. This should bring the average farm working expenses back to an anticipated $3.55 per kg MS this season, the lowest level since 2009/10.”
Mr Mackle said reducing the break-even price is tremendous recognition for New Zealand dairy farmers and the resilience they have shown.
“Being able to reduce the break-even milk price tells us that dairy farmers have cut costs further than we thought. This cost control is resulting in more efficient dairy businesses, which is key to resilience.”
TheCattleSite News Desk