Kiwi dairymen set for bumper payout
New Zealand dairy farmers are heading for a record payout as global dairy markets remain buoyant.
While the final price for the 2010/2011 season will not be fixed until August, market analysts are predicting NZ$7.90/kg for milk solids. This equates to 37c/l for Kiwi farmers' milk with average protein and fat levels of 3.8pc and 4.9pc respectively.
The price represents somewhat of a bonanza for New Zealand farmers, given that average payouts prior to 2008 were consistently under NZ$5/kg (€2.80/kg) milk solids.
The typical breakeven price used by most Kiwi farmers is NZ$3.75/kg (€2.07/kg).
With the herd size in New Zealand increasing by 10 cows a year, and now averaging 376 cows, Kiwi dairy farmers' incomes are set to increase sharply.
This has fed the continuing conversion of former drystock and tillage farms into dairy units, particularly on the South Island.
However, there appears to be huge scope for further expansion, with just 12pc of key regions such as Southland currently used for dairy production.