Farmer confidence is lifting with beef, sheep and dairy prices.
Bill Harrison
Sheep and beef are fetching an estimated 30 per cent more at stock sales compared to last year, said PGG Wrightson sheep and beef rep for Piopio and Te Kuiti Bill Harrison.
Dairy giant Fonterra raised the midpoint of the 2024/25 season forecast Farmgate Milk Price by 50 cents to a record $10 per kilogram of milksolids on December 5 less than a month after lifting the midpoint to $9.50 on November 11.
Todd McClay talks to farmers at Mystery Creek. Photo: Stephen Barker.
The lift in fortunes follows Federated Farmers national president Wayne Langford’s revelation to Prime Minister Christopher Luxon and Minister of Agriculture Todd McClay on November 26 that farmer confidence was at a record low.
The organisation had been surveying farmer confidence for 12 years and things had never been so bad, he said.
Harrison said sheep and beef prices were “coming back pretty good” at stock sales.
“The market is up around 30 per cent,” he said. “It’s looking a lot better than last year.”
Wools of New Zealand national wool manager Simon Averill said the market had been steady for the last few sales.å
“Confidence is improving especially with positive forecasts coming out for both the Beef and Lamb markets,” he said.
“The wool price improvement certainly is a positive for sheep farmers around the country. Some parts of the country like the Hawke’s Bay are experiencing dry conditions which has its own sets of challenges.”
Andrew Myers
Roto-o-Rangi dairy farmer and Fonterra Co-Operative Council member Andrew Myers welcomed Fonterra’s record Farmgate Milk Price.
“It’s better than good news, it’s fantastic,” he said.
“I have talked to one or two dairy farmers, and they are over the moon. There are signs that things are improving. We are just happy that we can contribute to our communities.”
Ongoing compliance costs had hurt farmers, he said.
Piopio dairy farmer and Fonterra Co-Operative Council member Paulette Johns agreed with Myers.
“The vibe is very positive,” she said.
“We were a little surprised to get the extra uplift before Christmas and it’s very good news. What’s good for us is good for our community.”
Miles Hurrell
“We’ve seen a recent recovery in demand out of China as domestic milk production rebalances and demand from Southeast Asia continues to be strong,” Fonterra chief executive Miles Hurrell told farmers in an email.
“We are continuing to monitor factors that may influence global supply and demand dynamics, including any potential impact from heightened geopolitical uncertainty.”
The first payment to farmers to change will be December paid January.Upon hearing the news of a record Farmgate Milk Price, Open Country Dairy supplier John Hayward said: “That’s pretty cool news, isn’t it? It’s positive for the whole community.”
Open Country Dairy had paid him $8.81 per kilogram of milk solids last month and he was using the capital to pay off farm debt. He was expecting further rises as Open Country Dairy generally paid more than Fonterra.
John Hayward
“You can’t count it until it’s in the bank,” he cautioned. “We have got a long way to go through the season yet, and things can change. We are in early December, and we have got to get to May. Most guys will be cautious.”
Sharefarming Consultants founder Louise Gibson also cautioned restraint, urging farmers to use the opportunity to reduce debt and invest in tools that drive efficiency.
“Next year is not the year to rush out into a variable order sharemilking agreement without testing your budgets against historic lows – think $5 or less – or rush into taking on too much debt just in case this is a repeat of cycles of years gone by,” she said.
“If you have contract milkers, consider where you can profit share – they have had to ride the milk price lows through lower inputs and working with infrastructure that hasn’t been improved or repaired on schedule.
“Look at your houses on farm – this could be an opportunity to invest in getting them up to Healthy Homes standard and make them more attractive to staff and sharefarmers.”
Louise Gibson from Sharefarming Consultants cautioned restraint
