NZ Dairy Farmers Improve Efficiency

NEW ZEALAND - Industry body DairyNZ says New Zealand dairy farmers have sharpened their systems and reduced costs through this sustained low milk price period.
calendar icon 2 August 2016
clock icon 1 minute read

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.”

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