Dairy farmers can look back on 2016/17 with a sense of relief that milk prices have bounced back from a deep slump, but the sector faces challenges this election year as water quality and immigration issues come to the fore, says Federated Farmers dairy chair Andrew Hoggard.

This time last year, farmers were looking at what was then likely to be the third consecutive season of sub-par prices, when Fonterra’s opening forecast came to just $4.25 a kg of milksolids.

Fonterra’s farm gate milk price forecast has since been revised up to $6.00/kg for the season, which ends on May 31, comfortably ahead of Dairy NZ’s break even point of $5.05/kg, as global supply and demand conditions come more into balance.

“This time last year, things were looking pretty grim,” Hoggard said. “There was a slight improvement in the milk price [from $3.90 in the previous year], but it was not a hell of a lot,” Hoggard said.

The NZ Herald

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