The Reserve Bank Says Falling Dairy Prices And Rising Costs Are Putting Pressure On Farmers’ Profit Margins

The Reserve Bank says falling dairy prices and rising costs are putting pressure on farmers’ profit margins. In its latest Financial Stability Report, the bank singled out increasing farm debt servicing costs as a concern. The bank says falling dairy prices over the last six months alongside increasing farm input costs, such as fuel, fertiliser, and labour, are putting pressure on profit margins. Fonterra is now projecting a reduced midpoint price of $8.30 per kilogram of milk solids (kgMS) this season, which ends on May 31, driven by the slowing global demand, particularly from the Chinese market.