"Put a brake on costs dairy farmers"

NZ hasn’t just lost its place as the world’s lowest cost dairy producer, our costs are now on a par with Ireland, a multi-national farmer with a foot in both camps told last week’s Large Herds Conference. Clinton has 1450ha and 2500 cows in Southland, plus dairy farm investments in the US and his home country, Ireland. Increased land values and a massive debt burden are key factors reports Rural News. NZ's farmers need to recognise the problem and stop unnecessary spending, he says. Some farmers have backed away from the day to day running “maybe a bit too much. There’s a case for a bit more personal involvement… The further you are away from milking the cows, the more it costs.”Banks should offer the lowest possible rate. Farmers are the best possible business they can get and they should be doing it as cheaply as possible. They may not get a huge margin but there are very few defaults.” A comparison with lamb prices between NZ  and the EU illustrates his point. New Zealand gets $6.12/kg for lamb after processing costs, while in the EU the average is $13.13/kg. In contrast, prices for whole and skim milk in the EU and NZ are on par. That’s the difference between a single seller and multiple sellers. And one of the new companies processing milk in NZ is one of the companies keeping that lamb price at $6.12/kg.” As chairman of a dairy group that negotiates prices with Tesco, one of Europe’s largest retailers, Clinton knows firsthand the importance of a strong negotiating position with such organisations. “They are not easy meetings because they have so much power… They are not easy people to talk to.” For all his concerns, Clinton concludes that there is still no better dairy farm structure in the world than a 600 cow herd in Southland milked through a 40-a-side herring bone or 50-bale rotary, with three people working on the farm. “This is the best and easiest place in the world to produce milk.”