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.
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