|
UDDER FACTS
Paul Brown MANAGING DIRECTOR
This year is starting very differently to last year - with uncertainty, but hopeful of good prospects. Payout recovery is faster than the fall, with relief, but a
number of parameters have changed.
Last season, credit was freely available with plenty of competition between banks to offer their packages. However, this has been rescinded to a level of over
conservatism - the pendulum effect. Cash flows are squeezed, effectively placing debts / unpaid bills onto industry service companies to carry. This is still a regular occurence, often
with little thought to the outcome. In many cases, these companies share the same bank as the farmer, with the bank saying ‘no’ to the farmer, putting the debt back within the same
bank.
Payouts have jumped significantly and this season’s payout looks promising. However, the dilemma is that Fonterra / farmers / banks alike, need as much
money as possible left in their own accounts. Compromise and retention of some form will probably be the result. Most farmers I have spoken to are happy with consistency for 1 - 3 years
at $6 - $6.50 and would request Fonterra to control the highs and low. Removing the highs also removes the price hikes with on-farm costs. These would rise again if payouts increased.
Another changed parameter is that more dairy farmers now have a better understanding of all cost structures - I would have refrained from saying this last year. As
payouts increase, increasing costs to produce extra MS will be closely analysed - great! Making money from dairying is about more than turn- over and production; it’s about the
‘leftover’ or net return. This downturn has enabled the industry to look closely at the way we want to manage farms, regardless of the options of others. The invincibility
factor of the dairy industry and human greed factor in bankers / farmers / service industries alike, has been clearly shattered. Good sensible business practices are now securely in
place. It is interesting to observe new initiatives resulting from the adverse situation.
2010 is an interesting year to monitor how the industry adjusts to the initiatives.
|
SIDF - DAIRY STOCK SPECIALISTS FOR:
|
|
HERD SETTLEMENTS
|
COWS / YOUNGSTOCK
|
|
BOBBY CALVES
|
CULLS
|
|
BREEDING BULLS
|
FEED
|
|
GRAZING WINTER
|
GRAZING LONG TERM
|
|
DAIRY STOCK VALUATIONS
|
|
|