Eastern Bay of Plenty dairy farmer Shannon Munro says she could lose up to $150,000 for the year, following the shock news that dairy giant Fonterra has cut its new season payout for the second time in only two weeks.
“We always try to budget for an unexpected lower payout,” Munro (Ngāti Whātua) says.
“But with the current economy and the price of day-to-day running costs still at an all-time high - we are really feeling the pinch.”
Fonterra said it expected to pay farmers between $6 and $7.50 per kilogram of milk solids this season, down from its revised $6.25 to $7.75 per kgMS range announced a fortnight ago.
“Global dairy trade prices have fallen sharply since we released our opening forecast for the season in May, with the overall index down 16% over that period,” Fonterra CEO Miles Hurrell says.
“Reduced demand from key importing regions for whole milk powder is continuing to weigh on prices. While indications are demand will start to return over the second half of the 2024 financial year, we do expect the pace of demand growth to be subdued relative to initial expectations.”
Furiously cutting costs
Munro says they are continually looking for different ways to cut costs, including letting go a staff member, leaving herself and her whānau to run the farm on their own for the past three months with no days off, but she remains hopeful.
“We have two mortgages to pay, one on our herd and one on a rental property. We have higher interest rates, property rates, insurance etc.
“For us, it just means we may not be able to take our whanau for our yearly overseas holiday but we live in paradise, so what better way to use our own backyard as our playground and experience all it has to offer.”
She says their last resort is to sell their farm, ultimately “but that’s not on the cards just yet.”
Fonterra is scheduled to release its 2023 financial year annual results on September 21, and its annual meeting is on November 9.