Times hard, dairy farmers claim

Wendy Clark was hoping for a higher forecast payout so there would be some leeway to break even. Photo / Brett Phibbs

Dairy farmer Wendy Clark says Fonterra's forecast payout of $4.55 per kilogram of milksolids for the coming season will make things hard.

"This is going to be extremely difficult, that's pretty bleak news," she said.

"We were certainly hoping for more because that payout reflects the market returns right now and last year we had a forecast payout that went backwards.

"So we were hoping that it would start at a respectable level so it had some distance to fall but $4.55 was the break-even point two years ago for making a kilogram of milksolids so that's scary stuff."

Clark has a small dairy farm with 120 cows near Pukekohe and is the Federated Farmers president for the Franklin sub-province.

"We're debt free, my husband works off-farm. I know we're not going to go under; we're not going to make money for a while but we'll still hang in there because we believe in the dairy industry and it's the job I love," Clark said.

"If you've got a mortgage you're in trouble, that's basically it."

Half of dairy farmers were experiencing cash flow difficulties this year, she said.

"The bankers are telling us that dairy farmers on average are asking for extensions to their overdrafts of between $100,000 [and] $150,000.

"So that gives you an indication of how far out of pocket they are already."

Certain costs could not be avoided, including animal health costs, Clark said.

"But anything that's discretionary we will stop spending on."