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Speaker 1: It has been a brilliant week for our dairy farmers.

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Speaker 1: Fonterra has delivered a bumper first half result with net

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Speaker 1: profit up to seven hundred and twenty nine million dollars,

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Speaker 1: a dividend of twenty two cents a share will be paid,

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Speaker 1: and the midpoint milk price is still at ten bucks

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Speaker 1: a kilo. Chair Federated Farmers Dairy Industry Group, Richard McIntyre

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Speaker 1: is with us. Good morning, Richard, good morning. So is

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Speaker 1: the mood the vibe on the farm shifting to something

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Speaker 1: a little bit more positive?

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Speaker 2: Yeah, farmers are, or dairy farmers are a lot more

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Speaker 2: optimistic at the moment. You know. Obviously we've got a

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Speaker 2: few that are going through a drought at the moment

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Speaker 2: in the Northoland, but a lot of it rain over

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Speaker 2: the last three days, which is sitting void spirits a

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Speaker 2: little bit in that respect. But look, you know, a

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Speaker 2: ten to a milk price is great. You know. The

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Speaker 2: fact that's becoming more and more certain is really really positive.

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Speaker 2: And we're hearing a lot of talk about attend to

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Speaker 2: a milk price for next season as well, which is awesome.

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Speaker 2: So the break even milk price is sitting at around

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Speaker 2: eight dollars fifty at the moment, so it's still really high,

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Speaker 2: but there's still a reasonable margin there for the average farmer.

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Speaker 2: A lot of talking about, you know, paying down some debt,

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Speaker 2: you know, a lot of accumulated some debt over the

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Speaker 2: last few years to paying that down, some deferred maintenance

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Speaker 2: or some capital projects. And probably you know, for the

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Speaker 2: first time in quite a while, I'm hearing a lot

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Speaker 2: of farmers starting to ask but a few questions and

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Speaker 2: talk about what they could or should invest in their

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Speaker 2: farm that will future proof it for the next ten

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Speaker 2: to twenty years. So you know, that is awesome.

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Speaker 1: What is the answer to that?

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Speaker 2: Look, it really depends on the farm and this situation.

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Speaker 2: You know, there are a lot of improvements that can

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Speaker 2: be made to I guess, focus on productivity and production.

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Speaker 2: There's there are approvements that can be made to reduce

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Speaker 2: greenhouse gas emissions or improved water quality, and it depends

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Speaker 2: on I guess the starting point for those farms and

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Speaker 2: whether low hanging fruit is first and foremost.

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Speaker 1: This follows forecast this week of back to back good seasons,

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Speaker 1: which is quite unusual, isn't it? Can it last?

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Speaker 2: Well, that's a really good question. So it is quite

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Speaker 2: rare to have a couple of good seasons in a row.

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Speaker 2: So often when you have a really good milk prices

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Speaker 2: because international milk prices are really high. And although we

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Speaker 2: although we produce a large proportion of the milk that

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Speaker 2: is traded across borders, we only produce a small proportion

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Speaker 2: of the milk that is produced in the wild, and

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Speaker 2: so a lot of the other producers in the world

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Speaker 2: actually just ramp up production when prices are high, and

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Speaker 2: often they overshoot a little bit and oversupply the following

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Speaker 2: year at the milk price jobs, so we've always going

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Speaker 2: to be really aware of that. You know, these productions

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Speaker 2: for next year great, but there is a chance that

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Speaker 2: the milk price might drop still and.

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Speaker 1: You're all concerned about the global economic instability at the moment.

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Speaker 2: Look, I think everyone's a little bit worried about where

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Speaker 2: that might go this and there a little bit of uncertainty.

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Speaker 2: But you know the other side of it is in

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Speaker 2: New Zealand produces really good, safe food and you know

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Speaker 2: it's well with grass feed. It's sought out throughout the world,

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Speaker 2: and so you know, we typically get a bit of

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Speaker 2: a premium for that. So in any sort of trade

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Speaker 2: wards or anything like that, you know, typically we'll still

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Speaker 2: have people that we want to buy, all countries that

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Speaker 2: we want to buy milk product. So last time, you know,

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Speaker 2: Trump gotton, we had all that talk about tariffs, etc.

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Speaker 2: What really happened was that Mexico decided that they really

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Speaker 2: wanted our milk products over over America's and we set

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Speaker 2: and sold a hold of milk fare. So that's yeah, yeah,

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Speaker 2: we create opportunities as well.

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Speaker 1: Thank you so much for your time, Richard McIntyre. For

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Speaker 1: more Familily Edition with Ryan Bridge, listen live to news talks.

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