The Country 15/07/26: Tracy Brown talks to Jamie Mackay

DairyNZ chair says margins are being squeezed on-farm with a forecast milk price of $9.25 offset by a breakeven milk price of $8.79. We also compare cows and countries, following her recent trip to Ireland.

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Episode Transcript

Speaker 1 (00:00):
Tracy Brown is a Madame Matta dairy farmer and also
for her sons the chair of Dairy en Z doing
a great job. Great to catch up at field Day's
Tracy and the primary industry in New Zealand Summit and Awards.
I want to start if I can, with the subject
I was talking to Heather Duplessy Allen about last night
on news talk Z be doing the sums on the

(00:21):
margins and dairying. They're getting a bit squeezed.

Speaker 2 (00:25):
Yeah, they are, and we would encourage farmers to just
be caught us going into the season court, you know,
cautiously optimistic. Things don't move around a bit, but there
are still quite a bit of global uncertainty. As we
all know, fon Terra is just he bet their forecast
milk price, so you know, we'll need to keep an

(00:45):
eye on that break even milt price. Jamie darien Z's
current number is eight seventy nine. So as you say,
with a sort of a nine to twenty five midpoint,
there's not a lot in the for principal repayments and
additional capital expenditure iron above depreciation, So people just need
to kind of be careful of that and play well.

Speaker 1 (01:07):
See. I did a back of the envelope calculation for Heather,
and Google told me that the average size farms four
hundred and forty eight cows, the average production for cows
four hundred and fourteen milk solids. Stop me if I'm
wrong here, So that gives you one hundred and eighty
five thousand milk solids. And with that break even milk price,
you're going to only make a surplus on the average

(01:28):
farm of eighty five thousand dollars. And I said to Heather,
that's not that much if you've got six or eight
million dollars, or maybe more if you're in the white
cattle like you are invested in that dairy farm.

Speaker 2 (01:41):
Yeah, yeah, No, it is a concern, and I think
the saint to keep an eye on, particularly this season
is farm working expenses. So last year in our break
even milk pricely had five sixty five in there, and
in this season's four past a farm working expenses and
you know they'se are the actual numbers are based off

(02:01):
the real data from dairy Base in our economic survey
predicting six nineteen. So the FIR dump in there, Jamey
of around fifty cents and we had a jump of
around twenty cents since twenty twenty toe and farm working expenses,
so that you know that is something that people are
going to have to keep an eye on and just

(02:23):
be a junt with monitoring budgets and making cautious decisions
about where they spend.

Speaker 1 (02:29):
Now, Tracy, you've just recently been to Ireland South thunder two.
Before everyone jumps up and down about junkets for dairy
en z, I think it's something to do with your
Nuughfield scholarship that you didn't quite get finished, or the
trip you didn't quite get finished during COVID. I've only
been to Ireland once two thousand and three, that's twenty
three years ago. Smoking the bars was one thing that

(02:50):
I couldn't believe because we'd gone smoke free. The other
thing back then was the size of the dairy cows.
They were like houses, they were like big bulls, and
the average herd size was only about fifty or sixty.
I understand that numbers increased, but how does their dairying
compare to ours?

Speaker 2 (03:09):
Yeah, it was a really interesting Jamian long over Joe.
As you say, I hadn't been able to travel because
of COVID up there, so you know, we do have
mu Zealand had a lot in common with the Irish,
so changed quite a bit. Now the average herd size
is one hundred cows and the cows I think would
be quite a lot smaller, more looking like a KeyWe cow.

(03:30):
In fact, there's a lot of New Zealand genetics used
up there, and many farmers we visited we're proud of
the keys cows they had in their herd, so you're
quite a different looking cow. The huge focus on grass
system called pasture based islands, so you know, whether you're
a scientist, whether you're a farmer, whether you're a student,
where you're oral professional, everyone uses the same database, so

(03:53):
they've got more data points and so increased accuracy, so
they're able to sort of help use it for productive
decision making. Big focus on beef on deby no Bobby calves,
so they sort of really focusing on a breeding index
for beef with those calves and buying and selling based

(04:14):
on that. So they've done away with the how calf
looks in terms of you know, four white socks and
a white mark on its head and all that sort
of thing. It's purely on genetics, big focus on training
and really developing people strong farm systems knowledge, and then
they've really got themselves quite organized around catchment groups. They've

(04:35):
got a lot of pressure on the EU from the
EU around nitrogen derogation, so they've got whole communities in
supporting farmers around and proving water quality outcomes that they
might have rural professionals, I've got teachers, they've got scientists,
they've got farmers, students, everybody is sort of helping improve
those water quality outcomes. So they sort of looked at

(04:57):
New Zealand what New Zealand's doing, and then just got
themselves much more coordinated and organized quite quickly because they've
got a bit of a burning platform.

Speaker 1 (05:08):
Well, they're a very comparable nation to us in many
many ways. Hopefully they're not comparable to us. At Eden
Park on Saturday, we're a wee bit better than them,
Tracy Brown, Look, I'm out of time to talk about
PC one another subject for another day, but thanks for
your time. I always enjoyed chatting here on the country.

Speaker 2 (05:25):
Thanks Jamie,