DairyNZ 2023 View from the Cowshed: Finances and regulations farmers’ top concerns

The dairy industry is projected to generate over $25 billion in export revenue this year alone.

DairyNZ’s 2023 View from the Cowshed survey highlights the significant impact off-farm factors are having inside the farm gate.

The recent fall in the farmgate milk price had only added to farmers’ concerns, which this year centred on the business viability impact of inflation and regulations, DairyNZ said.

“This year’s View from the Cowshed survey shows farmers have been very concerned, for some time, about the impact of inflation and compliance on their businesses,” DairyNZ chair Jim van der Poel said.

“Declining revenues from the reduced milk price will create additional challenges.”

The dairy industry is projected to generate over $25 billion in export revenue this year alone, van der Poel said.

“It’s vital we support farmers to succeed, given their significant contribution to local communities and their economies.”

Farmer concerns from the View from the Cowshed have contributed to DairyNZ’s five policy recommendations for after the 2023 general election.

Read the full View from the Cowshed report at dairynz.co.nz/VFTC

View from the Cowshed 2023 results

Farm finances

Over the past year, dairy farmers have felt the pinch of inflation, with almost 75 per cent experiencing cost increases of over 20 per cent.

“This is impacting their business viability, especially when combined with the reduced milk price,” van der Poel said.

He said many farmers would struggle to make ends meet and be focused on minimising losses this year.

“It’s vital the forthcoming government keeps tight control of spending and avoids contributing to inflationary pressures.”

Regulations

The View from the Cowshed survey shows dairy farmers’ biggest concerns about government regulations are:

• impracticality (72 per cent),
• too much change at once (69 per cent) and
• speed of change (64 per cent).

Regulatory requirements negatively affected farmers and their businesses, while excessive regulations created frustrations, van der Poel said.

“It does not make sense to add additional regulation costs for little benefit.”

DairyNZ is calling for an independent regulatory review panel, made up of experienced farmers from across the primary sector.

“The panel would review all proposed regulations to ensure they are necessary, practical, cost-effective and will achieve desired outcomes.”

DairyNZ chair Jim van der Poel.

Workforce

The View from the Cowshed survey findings also emphasise the pressing need to resolve workforce challenges, including staff shortages and retention.

A total of 26 per cent of farmers say they don’t have enough staff to meet their needs, while 29 per cent are never, or rarely, able to find staff with the skills and experience they need.

“To fill staff shortages on dairy farms, we need to recruit people best suited for the roles,” van der Poel said.

DairyNZ wants policymakers to continue collaborating with sector organisations to improve recruitment and retention.

This includes flexible immigration policies and support for the Great Futures in Dairying Plan (the sector’s long-term plan to build great workplaces and workforce).

Mental health

Forty-eight per cent of farmers said they, or someone on their farm had experienced mental health issues in 2023.

Sixty per cent said there was not enough rural mental health support.

Van der Poel said DairyNZ was advocating for dedicated rural mental health funding and an increase in the delivery of appropriate services in rural communities.

“Increased financial pressure over the next year means it’s very important we accelerate this work.”

Climate change

Most farmers surveyed in the View from the Cowshed think the current methane reduction targets for 2030 and 2050 are too ambitious.

Van der Poel said methane reduction targets must reflect scientific developments, global emissions goals and economic realities faced by farmers.

They must also accurately reflect the warming impact of methane, he said.

“That’s what we’ll be advocating for when the Climate Change Commission reviews emissions reduction targets in 2024.”

Overall, dairy farmers were “doing a magnificent job” delivering for their families, communities and New Zealand, van der Poel said.

“There are challenges ahead for the sector and we need to avoid putting unnecessary barriers in the way. DairyNZ will continue to advocate for the sector’s success and ultimately that of New Zealand.”

Listen to Jamie Mackay interview DairyNZ chair Jim van der Poel on The Country below:

DairyNZ and dairy farmers’ requests for the 2023 general election

• Farm finances: Tight control of government spending to avoid exacerbating inflationary pressures.
• Regulations: Establish an independent regulatory review panel, to provide feedback before regulations are implemented.
• Workforce: Collaborate with sector organisations to improve recruitment and retention of dairy workers.
• Mental health: Allocate dedicated funding for rural mental health, and targeted delivery of services in rural areas.
• Climate change: Ensure review of emissions targets is fair, works for farmers and accurately accounts for the warming impact of methane.