While two $9-plus pay-outs for dairy farmers looks fantastic the reality is rising farm costs and environmental changes are stripping away any margins. Farmers are watching prices go up for fertiliser, fuel, agri-chemicals, wages, animal feed and health products, power and winter grazing. A record $9 starting point is being advanced for the 2022/23 dairy season by Fonterra and Canterbury-based Synlait Milk. Analysts are cautiously supporting the new-season mark despite a mixed bag at the Global Dairy Trade auction, Covid-19 implications, freighting headaches, the Russian invasion and rampant inflation. Federated Farmers North Canterbury chair Karl Dean says the high pay-outs are just countering inflationary pressures on farm. He highlights rising fuel prices with tractors costing $1000 to fill pushing farm inflation close to 1980s levels. Karl Deans says even a drop to $8/kg would be more devastating than in 2014-15 when it went $4.40/kg purely because every cost has increased.
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