I see in todays Business News that a large dairy system which owes the BNZ $36 mil has had receivers appointed, is the the sign of things to come, can someone add further details ?
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I see in todays Business News that a large dairy system which owes the BNZ $36 mil has had receivers appointed, is the the sign of things to come, can someone add further details ?
I am hearing even the biggest ones with 50 % equity being contacted weekly by their banks while being gouged 8.5% interest
"Rising costs, falling revenue
The 2022/23 dairy season was a bad combination of rising costs and falling revenue. DairyNZ estimates that dairy operating expenses in 2022/23 amounted to $8.16 per kgMS, up sharply from $7.23 in 2021/22. The start of the war in Ukraine in early 2022 led to a sharp rise in the cost of diesel and fertiliser, and rampant inflation bumped up the cost of nearly everything else. Fonterra’s payout to farmers for 2022/23 was estimated to be $8.20, down from a record level of $9.30 in 2021/22. These shifts take the average farm from a solid profit in 2021/22 to barely breaking even in 2022/23. Across the dairy farming industry, this amounted to a drop in revenue of $2.0b.
Heading into the 2023/24 season, Fonterra dropped its forecast payout further, to $7, then $6.75, driven primarily by weaker demand from China. The latest drop amounts to a $2.7b fall in revenue for dairy farmers, on top of the $2.0b drop in the previous season. DairyNZ forecasts that costs will ease slightly, taking the break-even point down to $7.51 for the 2023/24 season – an improvement, but still higher than revenue. The reduction in break-even is in part driven by farmers deferring expenditure to match the lower payout."
https://www.infometrics.co.nz/articl...-dairy-farmers
Been around since 2018 but I suspect a lot longer than that
https://app.companiesoffice.govt.nz/.../shareholdings
All I can see is Bright Dairy will end up with a business Partner and takeover this dog. ATM might be the runner up and it will be with conditions that work for both parties.
Milk, in any form whether its infant formula or solid etc is always going to be needed, she’s tough times balancing the books all round at the moment ( farmer or processor) however the market has its stellar years too
All industry's have peaks and troughs, this is simply one of the low periods.
Im in the milk not from cows camp. You can't get beer from a cow but you can brew it.