Listen to any market commentator in NZ or elsewhere and they will tell you we're operating in a time of great uncertainty. The speed at which we got here compared with the heady days of this time last year shows how quickly conditions can change reports Tim Mackle in the NZ Herald. Commodity prices were on a roll internationally, it seemed the world couldn't get enough of our milk and prices paid to farmers reflected that. Now there's no doubt we're facing challenging times. We've been here before and NZ's dairy farmers are a resilient bunch and know dairy farming has a positive long-term outlook. But we don't know how big the challenges are going to be, or how long they're going to last. However, it does not remove our need to farm sustainably and efficiently or lose focus on labour issues.Right now things are stacked against us. The next couple of years look pretty tight in difference between costs and payout. Although the forecast payouts - while lower than the heights of last season's $7.60 to $8 - are still good historically, costs have skyrocketed over the past year with the average farm expenses from DairyBase participants increasing by $1.10 per kg /ms. We have to keep our production systems cost-competitive, whether to compete with other lower-cost protein sources or as a basis for profitable value-added processing. We have to consider what adapting to the present market volatility means for our farming systems. We don't want to be playing catch-up to market conditions. NZ dairy farmers will be positioned far better if we can meet whatever market conditions may be thrown at us. This means keeping the core of our systems to low-cost grazing, while developing opportunities to add value to our milk over the medium-to-long term. Labour is another issue for dairy farmers and DairyNZ is working both with the employers, in helping them know what best practice is, and with employees, helping attract new blood to the industry and funding training initiatives, such as AgricultureITO. It's the good staff who are going to help maximise profit in the short-term and deliver on sustainability, and we have to position ourselves well by continuing to attract good people to take advantage of the global recovery when it occurs.
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