Mid Canterbury dairy farmer David Geddes, who has been in the industry for 60 years, thought he had seen the last of the big industry crashes in the 1980s.
“I had a lot of good mates who just had to walk off their farms back in the ’80s. I thought we were out of that now, but it keeps coming back,” Geddes said.
“When you look at the whole of the New Zealand economy and you see someone on $60-70,000 a year, it’s a good wage, but they can’t afford to put food on the family table, we are all in a bad way.
“I’m getting a bit long in the tooth these days so I have bit more time to study these things.”
Geddes heads a family dairy farming business that has survived the ups and downs of the past six decades.
“I’m pretty certain we will survive this round too but it does take prudent management,” he said.
“When the payout was $3.90 we had to borrow money. At $8 plus we had a pretty good year last year so we paid off some more debt.”
Farm maintenance also benefitted from the better year.
“We managed deferred maintenance on the silage bunkers, the irrigation, the farm tracks, we caught up a bit.
“There is a whole lot to be maintained. The rotary milking shed is 15 years old, $30,000 to redo the weir plates and rollers, then there’s tech systems, meters on the irrigation pumps, the vet still needs to visit.
“You have to factor all this in and manage it well.
“We have all heard the talk of $10 [payout] but we haven’t seen it yet and it’s further away than ever.
“We’ll put our cheque books away for a while and keep riding our pushbikes.”
The farming operation is always adapting and Geddes sees that as never changing.
“You have to look at how you can make things better for yourself.
“We are biological farming, getting on well with liquid fertiliser and saving money.”
But he said the real crunch will come in May, June, July and August next year.
“We are always looking a year ahead.
“We have got to budget for next year now and the banks are as in the dark as we are.
“Meantime I’m a not a dairy farmer, I’m a fulltime charity farmer, milking cows and going to lose a dollar [per every milk solid] for all our work.
“But, if I had my time all over again, I would still be a dairy farmer.”
Meanwhile, the impacts of cuts to forecast milk payments to the New Zealand’s 12,000 dairy farms will ripple across the wider economy with the arable sector also feeling the pinch, Federated Farmers arable vice-president grains Andrew Darling said.
The July Arable Industry Marketing Initiative (AIMI) survey shows sown and intended sowing feed wheat and feed barley crops are down 6% and 15% respectively on last season.
“There’s probably still a reasonable market for feed grain in the North Island but it’s hard to transport South Island grain up there at a reasonable price, especially in competition with Australian grain.
“It’s an expensive bit of water that splits our country in half, unfortunately.”
A large amount of the sold feed wheat, 58%, is still stored on farm.
“A good amount of this will likely have been at a good contract price for the grower, and the merchant will be starting to move that grain now, but dairy farmers, given the outlook, probably aren’t as keen to fill feed silos at the moment as they have been in past seasons,” Darling said.
