seizing the opportunity in the volatility challenge tim mackle chief executive dairynz
TRANSCRIPT
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Seizing the opportunity in the volatility challenge
Tim MackleChief Executive
DairyNZ
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Opportunities and challenges
What’s happening in our
dairy world
DairyNZ – equipping
farmers for the challenges
What does this mean on the
farm?
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Opportunities and challenges
What’s happening in our
dairy world
DairyNZ – equipping
farmers for the challenges
What does this mean on the
farm?
“The only function of economic forecasting is to make astrology look respectable.” – John Kenneth Galbraith
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History repeats?
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Source: DairyNZ Economics Group, UN COMTRADE (World Bank WITS)
Last cycle we had free-run…
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Confidential to Fonterra
World milk supply… NZ just 3%Global Milk Production - Top 25
(Includes Buffalo Milk)
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
To
nn
es
World milk production (2009) – 680 million tonnes
Source: DairyNZ Economics Group, IFCN
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Leads to volatility – it can be our friend
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Volatility favours the resilient
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0
5
10
15
20
25
30
35
40
45
Export volumes (milk equivalents)
Cost
milk
pro
ducti
on $
US/
100k
g m
ilk e
qui-
vale
nts
Global price band
Source: DairyNZ Economics Group, IFCN, OECD-FAO 2010-12
Arg
en
tina
New Zealand
Uru
gu
ay
Ukr
ain
e
Australia
USA
EU-27
…but we’ve got to stay competitive to win and thrive…
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Opportunities and challenges
What’s happening in our
dairy world
DairyNZ – equipping
farmers for the challenges
What does this mean on the
farm?
What DairyNZ is doing to help build resilience?
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We are not losing sight of..
There’s a short-term challenge, but it’s a long term game.
We need to make the right moves.
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Profit from efficiency gains ($/ha)
1998
-99
1999
-00
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2009
-10
2010
-11
2011
-12
2012
-13
2013
-14
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
PFP
$/ha
$50/ha/year
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Taking on nutrient limit challenges
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Good people build resilience
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Resilience through research
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More profit with less environmental impact
Profit
Footprint
< > 30%
The past(the last 10 years)
The present(Research proven)
The research challenge
The farmer challenge
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Opportunities and challenges
What’s happening in our
dairy world
DairyNZ – equipping
farmers for the challenges
What does this mean on the
farm?
What DairyNZ is doing to help build resilience
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Ju
ne July
Augus
t
Septe
mbe
r
Octo
ber
Novem
ber
Decem
ber
Janu
ary
Febru
ary
Mar
chApr
ilM
ay-100,000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
Closing Bank Balance Taranaki
Budget
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Tactics for tight times
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Become fit for the future
The resilient farmer
Resilient farm system
Great place to work
Commercially strong and
sound
Environmentally-responsible
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The execution challenge
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Look after yourself
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So in summary…
We’ve got some challenges, but tactics are in place at an industrylevel.
You need your own plan too.
We all need to execute our plans really well if we are to build a resilient industry.
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