Campbell Parker: DairyNZ CEO on farmers being warned to prepare for higher tighter margins as El Niño threatens higher costs

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The Mike Hosking Breakfast 2 min 2 speakers 5 chapters transcribed 1 hour ago
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What are the latest El Niño warnings and how might they affect New Zealand dairy farms?

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Mike Hosking 0:30
Yesterday we're on the farm talking about this tightened supply for milk, therefore possibly higher prices for farmers. Uh this morning the El Nino warnings come in from Dairy and Z. They got modelling.

How does El Niño impact different regions like Waikato and Southland?

Mike Hosking 0:39
Could push the national break-even milk price from eight sixty two to nine oh seven. Feed costs up, milk production down. Campbell Park is the CEO at Dairy New Zealand and is with us. Campbell, morning. Morning, Mikey. How ya? Very well indeed. Scale of one to ten, ten, you're freaking out. Where are you at with El Nino?
Campbell Parker 0:57
I think we're uh we're we're probably mid range on that. Um everyone's called for it. I think it was second of July that uh Earth Science New Zealand came out and said it is, you know, called it as a real risk.

What does DairyNZ’s modelling say about the new break‑even milk price and feed costs?

Campbell Parker 1:07
Um and I think the key message for farmers is to just to just be prepared. Um you know, I was in Southland last week and the interesting thing around El Nino is it plays out differently by region. So you know. And
Mike Hosking 1:19
so I was gonna ask you about that. How m how variable between Waikato and Southland, for example?
Campbell Parker 1:24
Yeah, very interesting. There was an article yesterday out of Environment Southland that um actually they've had their wettest winter in the last few weeks in fifty years, um, which is, you know, westerly uh regions can get more rain, um, easterly regions can be drier. So Uh we we've got updated information on our website, farmers uh including by region, what to you know, based on history of El Nino behaviour. Um but I think the main message is you know, farmers have been through this before and also being prepared Um but but you know, on the on the overall side dairy still remains
Mike Hosking 1:56
strong.

Are farmers financially prepared for tighter margins and higher expenses?

Mike Hosking 1:56
Yeah, at nine oh seven though break even uh d uh it's are people paying down their debt? 'Cause we we're not gonna get nine oh seven forever at break even. We've got to do something about this, don't we?
Campbell Parker 2:06
Yeah, and that's um you know, that's the modelling in terms of and I d I think the team, the economics team done good work with that, looking at El Nino and saying, Hey, where could the impact be? Uh, balance sheets are strong though, so there has been quite a lot de paid down over the last couple of seasons with good mook prices. So, you know, farmers are going into this in pretty good shape too.
Mike Hosking 2:23
Good stuff. We'll be fine. We're always fine. It's all about attitude. Campbell Parker, who's the CEO of Dairy New Zealand.

What advice does DairyNZ CEO Campbell Parker give for navigating the upcoming summer?

Campbell Parker 2:29
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