Support extended to dairy farmers

The dairy outlook is bleak for those in the rural industry across Northland.

Northland dairy farmers are grappling with the financial pressures of a second season of below break-even milk payouts.

Fonterra's shareholders learned this week their milk solids were worth only a grim $3.90 per kilogram at the farmgate, down from the 2015/2016 season's forecast of $4.15 kgMS.

People with high levels of bank debt are under extra pressure and rural support agents are working out ways to help some farmers cope.

"I know of people who are selling up," Northland Rural Support Trust co-ordinator Julie Jonker said. "The only ones who will not be affected will be those with a lot of equity in their farms or no debt."

Rural Support NZ had increased its facilitators to work with banks, government and other agencies to help farmers with budgets and contingency plans, Ms Jonker said.

Federated Farmers' Northland dairy spokesman, Ashley Cullen, said the situation was serious across the board.

"Nobody's safe with this one at the moment. This is not something Fonterra is responsible for, it's a global price and demand issue."

While there would be support via various agencies, farmers should also keep an eye out for each other, Mr Cullen said.

"These are very serious times as we all come to terms with the lower payout. I have not heard any news regarding forced sales but plenty of murmurs about changes in policy regarding lower cow numbers and more beef.

"Some will be unable to do either and may fall, but it's still early days. Northland will be hit harder as we are lower per hectare in production than the rest of the country but our land costs less."

Fonterra also predicted milk production will drop this autumn as farmers cut costs by reducing herds or feeding out less supplements.

In Northland, finding extra feed is unlikely to be a problem. Instead of the predicted El Nino-fired fourth drought in five years, grass and feed crops flourished under perfect summer growing conditions - farmers literally made hay while the sun shone.

Federated Farmers and DairyNZ are holding seminars to help sharemilkers, contract milkers and farm owners plan a path forward over the next year. The Northland event is on March 17 at Barge Showgrounds, Whangarei.