Soaring Costs And A “Profit Squeeze” Hitting The Agriculture Sector Have Farmers Continuing To Slash Their Budgets This Year

Soaring costs and a “profit squeeze” hitting the agriculture sector have farmers continuing to slash their budgets this year. DairyNZ chief executive Dr Tim Mackle says the rising costs hitting the sector were driven by interest up 39% feed 21 per cent and fertilizer 28% over the past 12 months. Tim Mackle says most farms will be feeling the “profit squeeze” and its important farmers identify must-haves and nice-to-haves to find areas to trim costs. His advice is to pause non-essential capital projects and share budgets with trusted advisors, bankers, accountants, and other farmers. He says it is great to get ideas from others about how they manage costs on their own farms. Total expenses for the 2022/23 season are forecast to jump to about $9 per kgMS up 11% on last season whereas the revised Fonterra Farmgate Milk Price midpoint is $8.30 / kg ms.