Sherwood said stock feed suppliers would act similarly, as will contractors involved in harvesting, re-sowing and planting.<\/p>\n
\u201cWinter crops are going in now,\u201d he said. \u201cIt\u2019s peak time.\u201d<\/p>\n
Suppliers are also struggling to give timeframes for on-farm deliveries. <\/p>\n
Sherwood said farmers also obviously faced bigger bills for running their on-farm vehicles, such as tractors and quad bikes, along with private cars.<\/p>\n
Added to this is \u201canything that\u2019s imported\u201d, such as minerals used for animal health.<\/p>\n
\u201cShipping costs will come through,\u201d he said.<\/p>\n
Sherwood said farmers also always face rising costs in areas such as staff remuneration. <\/p>\n
\u201cTo get people, you need to pay them good money.\u201d<\/p>\n
Another area regularly on the rise for farmers is the cost of repairs and maintenance.<\/p>\n
Sherwood said the bigger overall bill was tempered by increased returns to farmers from an increased payout and strong production.<\/p>\n
This gives farmers \u201cadditional margin\u201d.<\/p>\n
\u201cIt\u2019s a great position to have.\u201d<\/p>\n
Cash injection<\/p>\n
Fonterra suppliers can also look forward to a cash injection through the dairy giant\u2019s divestment of its global consumer business.<\/p>\n
Sherwood said farmers should not be in \u201cpanic-buying mode\u201d due to the current fuel issue.<\/p>\n
Some may be able to \u201ctrim a little fat\u201d in their costs by looking at feed conversion efficiency and pasture utilisation.<\/p>\n
\u201cIt\u2019s about doing the basics right.\u201d<\/p>\n
Driven by strong milk prices, DairyNZ estimates farmers will receive an average payout of $9.92 per kilogram of milksolids (kgMS) for the 2025-26 season. <\/p>\n
With a forecast breakeven milk price of $8.36\/kgMS, this points to an average surplus of around $1.56\/kgMS for the season.<\/p>\n
Season-to-date milksolids production (June 2025 to January 2026) is running 3.3% ahead of the same period last season, with Waikato showing a modest increase of 1.7%.<\/p>\n
Forecast<\/p>\n
Looking ahead to the 2026-27 season, DairyNZ forecasts a slightly lower average payout received. <\/p>\n
Key costs are forecasted to come down marginally, reflected in a slightly lower breakeven milk price at $8.31\/kgMS. <\/p>\n
The average surplus is forecast to remain above $1, at $1.07\/kgMS.<\/p>\n
\u201cThere are a lot of unknowns on the horizon on the global front that have the potential to adversely impact farmers,\u201d DairyNZ head of economics, Mark Storey, said. <\/p>\n
\u201cRises in oil prices or shipping costs flow through into fertiliser, transport and on-farm input prices, and this is something to keep a close eye on. <\/p>\n
\u201cI\u2019d advise cautious optimism.\u201d <\/p>\n
Bay of Plenty Federated Farmers president Brent Mountfort said farmers were \u201cquite comfortable\u201d with their returns at present, but the conflict in the Middle East could affect trade routes vital to New Zealand dairy exports.<\/p>\n
Federated Farmers Bay of Plenty president Brent Mountford.<\/p>\n
On the home front, he agreed that rising fuel costs will undoubtedly be passed on to consumers, including farmers.<\/p>\n
\u201cEverything in New Zealand relies on diesel.\u201d<\/p>\n
Mountford said technology around electric vehicles was still developing.<\/p>\n
\u201cIt\u2019s not there yet for heavy machinery.\u201d<\/p>\n
He said urea, a byproduct of oil and widely used by farmers to aid pasture growth, was likely to spike the most.<\/p>\n
Fencing costs \u2013 materials and contractors \u2013 have also effectively doubled in recent years.<\/p>\n
Mountford said farmers were price-takers.<\/p>\n
\u201cWe get charged for services we receive and told what prices we are going to receive for our products.\u201d<\/p>\n
Even with the current fuel issue, he believed farmers were not feeling \u201cdown\u201d.<\/p>\n
\u201cI\u2019m cautiously optimistic.\u201d<\/p>\n
\u201cYou have to be realistic about what is happening on the other side of the world. <\/p>\n
\u201cOverall, I think we are in a pretty good space.\u201d<\/p>\n
He said the drought of 2020 and Covid were \u201ca lot more concerning than what is happening now\u201d.<\/p>\n
Challenge<\/p>\n
The Ministry for Primary Industries (MPI) says it has been meeting regularly with the primary sector, including business leaders and industry groups in the farming and horticulture sectors, since the Middle East conflict started. <\/p>\n
\u201cThe sectors report that the increase in fuel costs is a challenge for businesses,\u201d an MPI spokesperson told Coast & Country News.<\/p>\n
\u201cFarmers and growers will face ongoing cost pressures if the volatility continues.<\/p>\n
\u201cThere is enough fertiliser supply to last until spring, although costs are expected to rise the longer the conflict continues.<\/p>\n
\u201cThe bulk of primary sector product continues to reach international markets, but on a case-by-case basis, we are helping exporters with certification to redirect product elsewhere if required.\u201d<\/p>\n
The spokesperson said the primary sector was resilient and extremely adaptable, and it had dealt with major shocks in recent years. <\/p>\n
\u201cThe sector is planning for any issues that might arise in the coming weeks.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Sherwood said stock feed suppliers would act similarly, as will contractors involved in harvesting, re-sowing and planting. \u201cWinter…\n","protected":false},"author":2,"featured_media":362839,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[95,138,802,7224,127,1872,12967,45554,2678,13484,111,139,69,19334,190831,801,18835],"class_list":{"0":"post-362838","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-and","9":"tag-business","10":"tag-costs","11":"tag-dairy","12":"tag-despite","13":"tag-face","14":"tag-farmers","15":"tag-fertiliser","16":"tag-fuel","17":"tag-higher","18":"tag-new-zealand","19":"tag-newzealand","20":"tag-nz","21":"tag-payout","22":"tag-pointy","23":"tag-rising","24":"tag-strong"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/362838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=362838"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/362838\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/362839"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=362838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=362838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=362838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}