New Zealand dairy farmers are looking down the barrel of a low payout this season, and possibly next season, but Trade Minister Tim Groser says the sector can tough it out.
In a speech at the New Zealand Dairy Industry Awards in Auckland on Saturday, Groser said dairy farmers had survived volatile times in the sector's 130-year history and would do so again. "I don't know how long this will last - a year maybe - but we will tough this out.
"The long-term trends are incredibly positive for protein consumption throughout the emerging world [and] have not changed and we will emerge stronger than ever," he said.
Groser told the Chinese dragon-themed awards ceremony that if dairy prices were on a one-way upward track, it would prompt more supply from New Zealand's competitors. "Yes, you can have too much of a good thing, but volatility is our friend," he said.
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Market signals suggest international dairy prices will again fall at tomorrow's GlobalDairyTrade auction. Last week, Fonterra said oversupply and extreme volatility on world dairy markets prompted the co-operative to lower its farmgate milk price forecast for 2014/15 to $4.50 a kg of milk solids from $4.70.
The co-operative will issue its forecasts for 2015/16 late this month, and private forecasters expect a farmgate price of around $5.70 a kg.
At the awards, Justin and Melissa Slattery were named 2015 Sharemilker/Equity Farmers of the Year, winning $53,500 in prizes.
James Foote became the 2015 Farm Manager of the Year and James Davidson was 2015 Dairy Trainee of the Year.
The judges said the winners were actively seeking to manage through tougher economic times in the dairy industry.
More than half of the finalists had changed careers to enter the industry.