Dairy income downturn?

Press, 10 February 1986, Page 2

Dairy income downturn?

PA Wellington Dairy farmers can expect a dramatic downturn in net incomes this year, says Mr Bruce Tolich, chairman of the dairy section of Federated Farmers. Dairy farmers would need a basic price for milkfat of nearly $4.40 a kilogram, instead of this year’s price of $4, to maintain real net incomes for the 1986-87 season. It would be impossible to achieve such a basic price

under present market and exchange rate conditions, he said. “The substantial lift in payout which would be needed to maintain net incomes has been caused by the Government’s once again losing control of Inflation,” said Mr Tolich. Figures from the Statistics Department showed that dairy farm inputs had increased 3.4 per cent between the June, 1985, and September, 1985, quarters. If this trend continued, farm inputs would

have increased 13.6 per cent over the 1984-85 season by June this year. Recent wage settlements would flow through during the next few months and might push this increase even higher, he said. The high level of interest rates continued to affect net incomes, and dairy farmers would hope that interest rates would decline over the approaching year. Most dairy farmers were expected to reduce their farm inputs as much as possible, although severe cuts affected production and their income levels even more, Mr Tolich said.