Perhaps if he cut down the beersies he might be able to afford Christmas [UPDATED]

UPDATE:  The missing headline:

werwrwer

Some people really are too stupid to save themselves.

Check this article from Fairfax where a poor hard done by farmer has decided to cancel Christmas in his household because the forecast payout from Fonterra is projected to be low.

Dairy farmers Liam and Louise Zander won’t be giving each other presents this Christmas after learning that Fonterra’s downward revision of the milk payout will strip hundreds of thousands of dollars from their income.

Dairy NZ figures released yesterday showed the revision from $8.40 per kg of milksolids last season down to a forecast $4.70 this season would remove $1.8 billion from the Waikato economy and hit the average dairy farmer’s income by $500,500.

“No Christmas presents for us this year,” Louise, who has two young children, said. “But that is just life as a dairy farmer.

“I will also have to look for a part-time job to help.”

Liam was more philosophical about the cut.

“You can’t really do much. You just have to keep chugging along. It’s one of those ups and downs in dairy farming.

“I try not to let it affect me too much. There’s no point dwelling over things you have no control over.”

Oh boo hoo…missing out on Christmas.

Perhaps if he cut down on the beersies they might be able to afford christmas.

1391632_10201354914287468_1647225079_nIf brains were dynamite this lot wouldn’t have enough to blow their nose.

I struggle to see how cancelling $200 of worth of christmas presents is going to help them in their predicament.

Still must be tough only having $500k to live on instead of $1M.

But the weapons grade whining from farmers over payouts is somewhat misplaced…as last years payout was a record high and this years is still not at record lows…not even close, actually.

Fonterra Tatua Westland Synlait Open
Country
Miraka Oceania
Dairy
$/kgMS   Milk Dividend   Total   Cash Retention
$ $ $ $ $ $ $ $ $ $
1998-99 A 3.58
1999-00 A 3.78
2000-01 A 5.01
2001-02 A 5.35
2002-03 A 3.34 0.29 3.63
2003-04 A 3.97 0.28 4.25
2004-05 A 4.37 0.22 4.59
2005-06 A 3.85 0.25 4.10
2006-07 A 3.87 0.59 4.46 4.72
2007-08 A 7.59 0.07 7.66 8.00 7.99
2008-09 A 4.75 0.45 5.20 5.38 4.58 5.03
2009-10 A 6.10 0.27 6.37 6.32 6.15 6.31 6.07
2010-11 A 7.60 0.30 7.90 8.10 0.58 7.70 7.76 7.56
2011-12 A 6.08 0.32 6.40 7.50 0.54 6.04 6.22 6.18*
2012-13 A 5.84 0.32 6.16 7.40 1.17 6.34 5.89 5.94*
2013-14 F 8.40 0.10 8.50 9.00 1.32 7.57 8.31 8.50 8.50* 8.75
2014-15 F 4.70 0.25-0.35 5.55-5.65 6.50 5.00 5.00 4.50-4.70
* Miraka is on record saying they pay 10c more than Fonterra

 

 

– NZ Herald, Interest.co.nz

 

 


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  • Will Travers

    looks like chugging is just the right term.

  • wanarunna

    there goes the his and hers matching Discoveries

  • In Vino Veritas

    They’re sharemilkers at only a 23% share of the farm profit, and have none of the benefits of the appreciating land value.

    • phronesis

      I’d say that land value just depreciated quite a lot. It would be more accurate to say that they have no share of the capital losses.

      • LabTested

        Brings back memories of Crafar farms being sold to the Chinese for top $ at the top of the market. Who is complaining now.

      • In Vino Veritas

        There is no cash gain or loss until the land is sold phronesis. When I said “appreciation” I meant that at the end of the day, the land owner would benefit from any gain in value (or conversely, as you say, capital loss on the land). I would say, that if the owner had borrowed and land values fell significantly, there’d be a lender at his door pretty quick.

  • kiwirog

    dairy farmer who has retired debt with payouts over past 4 years=fine, he who has debt funded the purchase of the neighbour’s property at the top of the market is learning that using leverage is not a one sided bet.

  • HogsWorth

    Farmers make me so angry – they are capitalists when prices are great and hand out bludger socialists when it is not, Any businessman with any brains invests in the good years (like the last two for dairy) to be ready for the average ones!

    • Woody

      Please explain the “hand out bludger socialists” comment.
      Most dairy farmers work darned hard for the money they earn and as price takers, they have very little control over their earnings. They are also amongst the most significant financial risk takers in the country with most carrying levels of debt to make whatever earnings they are left with. The numbers would make your average whinging Jaffa’s eyes water.

      No I am not a dairy farmer and never have been but I do have a business in the primary industry sector where clients expectations are very high and their understanding of the costs and risks involved in my business are minimal. In the last week I have had two occasions where I had discussions with clients around my costs, in both cases they estimated the cost of one of my items of primary equipment at $50,000. In both cases that cost was under estimated by $220,000. These are people involved in the industry so anyone outside it wouldn’t have a clue. The same goes with dairy farmers – standing on the outside looking in, it’s really easy to be an uniformed expert, a bit like a Labour politician but unless you have a direct involvement in the industry, you haven’t got a clue. As most of you here know, you can’t trust the MSM to present the facts so as always with MSM if you believe 1% of what they say you will still be wrong.

  • Please don’t lump all farmers in the same basket, I know a few and none of them have ever needed a handout and work on a median payout with anything extra being a bonus.

    • HogsWorth

      Granted, I know a few farmers that accept it is hard work with a constantly shifting market and they plug along and enjoy every minute of it. They also accept that it is the long game they are playing with the rewards at the end.

  • Curly1952

    Drinking the wrong beer won’t help his peace of mind.
    Thought I would have a look at the MPI farm monitoring reports. On a National basis, in the 2011/2012 year, the average budgeted drawings were $74,736.00 PA this was based on a budgeted payout of $5.26. The actual payout was $6.51 and the drawings remained the same however the figures showed significant Principal payments and Development which ensured the drawings remained static. Every farmer should have continued to keep his drawings under control and repaid debt in the last 12 months.
    Only those who didn’t put money away for a rainy day would be bleating!

    • burns_well_eh

      That would be the sheep farmers surely?

      • Curly1952

        Definitely Dairy. Sheep and Beef wouldn’t be anywhere near as good I wouldn’t think. Might have a look any way

        • Disinfectant

          Beef is going gangbusters and predicted by economists to offset the drop in export receipts for dairy farming.

          • Curly1952

            True for this year regarding sheep & beef. The figures I used for dairy were 2011/12 which are the latest in on the MPI site. Diversification is the best option however on most dairy farms it is.nigh on impossible to diversify.

          • Disinfectant

            I drive past one dairy farm regularly and noticed that he has kept all his steer calves.
            Very smart move on his/her part.

          • Cadwallader

            Correct. Interestingly due to the high price of beef venison is on the rise too. It seems only dairy (OK its huge) is having a tough time this year…orchardists, horticulturalists etc expecting a great season.

  • ploughboy007

    they are 23% sharemilkers,if the farm is doing 95000kg milksolids there income will be $102695 if payout stays at $ 4.70. From this they have to pay there share of expences (shed costs,electricity etc) plus the running of there bikes and proberly tracters ,acc and tax.If anything i thought they were quite sensible and were looking long term,working hard to cut there costs(there wont be much for a lower order sharemilker)and making sacifices to get ahead

  • Bayman

    Plus they’ve had a number of years of high payouts.

    Still Dairy Farming is hard graft whichever way you spin it and takes a special breed to do it, and do it well.

    If their revenue is $500k they’d have to have excellent cost controls to actually make any money on a decent size operation as well.

  • wooted

    Farmers (the moaning ones) crack me up. Every year that there’s a flood or drought or a price drop they want rates relief, but I have yet to hear a single one offer to pay a bit extra when they have a good year.

  • Cowgirl

    Last time I checked spending time with your loved ones and celebrating the birth of Jesus was free. You don’t have to spend up large to do that.

  • Andy

    In the UK, Chevron are laying off 23% of their staff due to the oil price drop, and other companies are doing similar.

    So it’s not just Dairy farmers feeling the pinch this Xmas

  • Rightsideofthebed

    To be fair, not having done the calculations, but I would say the forecast payout is probably the lowest for a long time, inflation adjusted

  • I was wondering why you took that position. Turns out that the NZ Herald have changed that article since this morning. The caption on the photo below used to say that they had to cancel Christmas because of the lower dairy payout.

    I suspect we weren’t the only ones to consider it absurd, because the backlash caused the Herald to change the wording.

    We (the people at Whaleoil) were angry that they were in the paper saying they had cancelled Christmas on their 3 year old.

    That may explain it.

    • burns_well_eh

      Yes, I read the article (in case I’d missed something in the post) just before commenting. I guess the article was slanted in a different way prior to the backlash.

    • Elinor_Dashwood

      Still don’t see how you get from that to an attack on “weapons grade whining”.

      • Because prices go up and down, and if you can’t survive in a down year, you’re in the wrong business.

        Cancelling your 3 year old’s Christmas because NEXT YEAR’s Dairy Payout will be lower is nasty, and it shows they are either trying to manipulate or they don’t know that the good years is when you put money to one side to survive the bad ones.

        • ploughboy007

          it this years payout, season from june to may so season is 14/15 next seasons 15/16 projected payout wont be annonuced till may 15.i dont know these people but i believe this is there first year sharemilking. yes cancelling xmas might be over the top but here is some people wanting to make sacrifices to get ahead and would a three year old notice

    • This is the same outfit that changed the feral West Coaster story afterwards.

      Still the headline hasn’t changed..they are still promoting the cancelling of Christmas.

  • Excitedly awaiting Whodunnit

    How many of these guys jumped on the dairy band wagon when it was the hot prospect, mortgaged themselves to get a herd and set up for dairy? By all means enjoy the fruits of your labour but expecting the goose to lay golden eggs without a slump is a little presumptuous. Most people put a little aside to cover the lean years, or is that just an old fashioned notion?

  • Tom

    I wish I had hundreds of thousands that someone could strip from my pay.

  • Dumrse

    Im convinced its Len Brown problem, just look at the length of the grass on the berm. Not been cut for months.

  • Dave

    Late to the party, but perhaps some perspective. Firstly, we run our own business, its still growing, in another year it will be profitable and will hopefully continue to grow. We survive on the goodwill of our clients, and their choice to come back and spend their money with us. Nothing more.

    I have no doubt these “farmers”will get a few dollars less this year, and after a few bumper years that is, well at least they had a few good years. We still don’t draw a wage, and last week had to tip another $15K into the business of our savings to cover wages, cashflow is a bit negative at the moment. Perhaps I should call Fairfax (aussie) and whinge about cancelling Christmas in our household as we cant afford it?

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