Dairy farmers facing 'a lot of pain' following Whole Milk Powder Downturn

Dairy farmers facing 'a lot of pain' following Whole Milk Powder Downturn

Dairy farmers are feeling the strain following a series of unfortunate events for the sector in the last week.

Whole Milk Powder saw a 10.9% price decrease at the latest Global Dairy Trade auction and just a few days later Fonterra reduced their already previously revised Farm Gate Milk Price range even further to a midpoint of $6.75 per kgMS for the 2023/24 season.

Carters Tyres brand ambassador Richard Loe told REX host Dominic George he knows just how tough it can be when prices drop so significantly in such a short period of time.

"There will be a lot of pain now, I don't know how you can soften it at all," he said.

"They will tighten the belts and I'd say they might drop a few numbers too."

Dairy NZ's latest report estimates the current breakeven milk price (BEMP) is $7.51, which is calculated by taking into account farm expenses, depreciation, interest & rent, tax, net drawings, net livestock and other dairy income.

Due to the nature of farming, Loe sympathised with the difficulty of having to continue to find money to fund day-to-day operations, explaining that most farmers aren't in a position where they can pick and choose when they want to work or can just change jobs at the drop of a hat.

"It's going to get worse…You're urban person is feeling it tough, well farmers are feeling it tougher, aren't they?

"Farming is a long-term commitment.

"Whether your income comes from milk solids, red meat, wool, anything. I don't think there is anyone in the rural sector that isn't feeling it."

He mentioned to George that some bigger farm operations might be able to drop a member of staff to cut back on expenses, and although that might offer a short-term solution, it comes with its own set of problems.

"If you're dropping a staff member, you're pushing the others to the limit and then you get burnout."

Listen to the full chat between Carters Tyres brand ambassador Richard Loe and Dominic George above.

To check out more episodes listen to the REX Today Podcast anytime on your favourite streaming platforms including Spotify, Apple Music and Rova or tune in to REX Mornings live on Magic from 5 am to 6 am every weekday.

Visit the Rural Exchange Facebook or Instagram page for more information and regular updates from the REX team.