Operating profit, milksolids per cow and per hectare were all up on previous years, Doole said in a statement.
"For the 2019-20 season we were fortunate to receive an above-average milk price of $7.05 per kilogram milksolids, which continued into the next season."
This enabled some farmers to catch-up on farm maintenance and debt repayment, while continuing to invest in environmental improvement on-farm, Doole said.
"Farm costs also increased, with higher fertiliser and supplementary feed costs. Although we saw a decrease in interest costs, this was not enough to offset increases in other areas of expenditure."
The annual survey shows that average operating profit was up 28 per cent on the previous season, at $2750 per hectare for 2019-20, while milksolids per cow and hectare were at their highest level to date.
"So we earned about $20 billion in exports in the 2019-20 season, that's despite the onset of Covid as well – we're pandemic-proof so to speak – which is really amazing," Doole told The Country Sport Breakfast.
Not only this, but every dairy dollar stimulated $1.50 in other industries, Doole said to Kelly.
"[So] that $20 billion in exports led to a $35 billion injection into other sectors in the economy."
Doole told Kelly that this money went into regional communities, "where often we have a lack of revenue for those businesses and those locations".
It was positive to see such a high operating profit for farms for 2019-20, compared to the 10-year average of $1645 per hectare, Doole said in a statement.
Listen to Brian Kelly interview Dr Graeme Doole on The Country Sport Breakfast below:
"Despite many farms nationwide being affected by a dry summer, production remained strong."
Operating expenses increased to $5.31 per kilogram milksolids (compared to 2018-19), which was above the previous high of $5.17 reported in 2013-14.
Feed continued to be the largest cost on New Zealand dairy farms, which was important for farmers looking to control farm costs, Doole said.
"To build their resilience for periods when milk prices are lower, farmers should look at their overall cost structures on-farm and identify where they can trim costs."
Meanwhile, sharemilkers experienced a good year, recording a 35 per cent increase in operating profit on the previous season to $1050 per hectare, while faced with similar cost changes, price volatility and weather conditions.
Dairy sector economic contribution
• Dairy delivers around $20 billion in export value
• Dairy directly adds $10.2 billion to New Zealand's economy
• Around 50,000 people are employed in the dairy sector
The annual Economic Survey analyses a representative sample of farmers, surveying 326 owner-operators and 124 herd-owning sharemilking farms (50:50 sharemilkers) across New Zealand for the 2019-20 season.
DairyNZ encouraged farmers to analyse their individual performance and compare their results with similar farms through its DairyBase and budget case studies.
Budget case studies look at several top-performing farms nationwide for the current season, to help identify opportunities to reduce the cost of production.
This was a useful benchmarking tool for farmers to get insights and ideas from, DairyNZ said.
Read the DairyNZ Economic Survey 2019-20 here.
Budget case studies are available here.
