Ag 22 september, 2016

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50c boost worth $125m locally BY MICHELLE NELSON

dairy industry group vice chairman Will Grayling said the news was a ray of light at the end of the tunnel. “It’s bloody good news,” Grayling said. “Even with a $5 payout we would like to think some people can start getting back on their feet and start recovering – there’s no magic number, farmers just need to keep pushing on with it, they haven’t had much choice.” Country-wide dairy farmers have been in survival mode with two years of depressed payouts to contend with. At its peak in 2013 the farmgate payout was $8.65kg/MS but by last season the record high had plummeted to $4.30kg/ MS, including dividends. Yesterday’s forecast also lifted the price 20c above DairyNZ’s break-even estimate of $5.05kg/MS. The revised forecast would be well received by everyone in the district, in par-

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A hike in the farmgate milk price will inject millions into the local economy and lift spirits across Mid Canterbury, an industry spokesperson says. On the back of the fourth consecutive rise in world dairy prices at the GlobalDairyTrade auction overnight on Tuesday, Fonterra announced the 50 cent rise, bringing the 2016/17 forecast to $5.25 per kilogram of milksolids. Combined with the forecast earnings per share range of 50 to 60 cents the total payout forecasts lifts to $5.75 to $5.85 before retentions. Nationally this equates to an extra $1b, $78,980 for the average New Zealand dairy farmer and inject more than $125 million into the Mid Canterbury economy. Federated Farmers Mid Canterbury

ticular rural businesses, Grayling said. Fonterra chairman John Wilson said the global milk supply had continued to reduce and demand has remained stable since the co-operative last reviewed milk prices in August. “Milk production in key dairying regions globally is reducing in response to low milk prices,” Wilson said. “Milk production in the EU for 2016 is beginning to flatten out and our New Zealand milk collection is currently more than 3 per cent lower than last season. However despite recent improvement in GDT auction prices, the high NZD/ USD exchange rate is offsetting some of these gains. “There is still volatility in global dairy markets and we will continue to keep our forecast updated for our farmers over the coming months,” Wilson said. GDT auction results P9

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