Ag 17 november 2015

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Tuesday, Nov 17, 2015

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Mid Canty farmers buoyed by increase BY NADINE PORTER

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Yesterday’s announcement from Fonterra of an increase of up to 55 cents per kilogram of milksolids is buoying Mid Canterbury dairy farmers and will mean most will now break even. Ashburton Forks farmer Graham Lowe said he was facing a $1 million loss in July, but efficiencies on-farm, coupled with the increase in payout and Fonterra support payments, meant he would now break even and might even make a small profit. “There’s definitely light at the end of the tunnel and not a train rushing towards us. It has been the worst five months of my farming career.”

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With a forecast farm-gate milk price of $4.60 Fonterra has lifted the total available for payout to $5.05-5.15/kg ms – currently equating to a total forecast cash payout of $4.95-5/kg ms after retentions. Fonterra will also increase the rate at which farmers are paid the support loan of 50 cents per kg ms, with the amount paid up to December increasing from 18 cents to 25 cents. Mr Lowe said while he thought Fonterra had over-reacted in dropping the price substantially earlier this season, he was pleased the co-operative had turned the price around. He had cut back on costs this season by not putting on super phosphate and other one-off costs that had saved him

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around $200,000. “Which you can only do for one year.” Mr Lowe had reduced his herd numbers to get through this season and said he would not go back to being as intensive in his farming practices to better cope with volatility. “We are not going to run at 110 per cent. “We can make just as much money from milking a few less cows and having a few heifers home.”

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