A Waikato farmer says “the storm is coming” as forecasts show the cost of producing milk could be above the midpoint that New Zealand’s major dairy companies are currently paying. Dairy Farmer Bart van de Ven says a dairy farmer in the Waikato says there are a lot of “sweaty” people out there, concerned about the declining payout in particular. He says his biggest cost increases are diesel, contractors and fertilizer. He says farmers are now having conversations about how to “make it through”. The storm is coming … wait until October. However, Fonterra chief executive Miles Hurrell says there is still confidence in the medium- to long-term outlook. DairyNZ DairyBase data is forecasting the total farm work costs for the current season to increase to around $9 per kilogram of milk solids for the current season – an 11% increase on last season’s $8.13/KgMS and that’s about 50cents higher than Fonterra’s current midpoint of $8.50/kgMS. The increases are driven by feed up 21%, fertilizer, up 28% and the interest rates – up 39%. The mid-season update says farm profit before tax is estimated at $146,300, a 31% decrease from 2021-22 and below the average for the past five years.
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