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14 Fences to mend and bridges to build Vol 22 No 32 | August 19, 2024
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Energy costs slice into sector yields NEWS
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Energy
DAIRY processing head is warning that milk prices this season are under real threat of being pushed downwards thanks to surging energy prices swamping the country. Open Country Dairy CEO Mark de Lautour told Farmers Weekly dairy processors are unable to continue to absorb the increases coming at them from all key energy suppliers. While his company is relatively insulated for now from electricity price contracts, these will eventually end. “We are fully aware of what is coming. We are in a tunnel with a big light coming down it.” The squeeze of energy costs on the primary sector’s processors is already being felt. Ruapehu District mayor Weston Kirton has signalled the closure of two timber mills in the Central North Island as they grapple with a 600% increase in electricity costs since 2021. The mills’ closure will put 300 people out of work. Kirton said it is vital that the government top up such significant employers in the regions until a solid energy plan is formulated. “We are not experts on the electricity market and how you can resolve the issue. But we
are on the receiving end of its outcomes, which are bringing grief to our communities,” he said. Electricity spot price increases continued unabated last week, up 33% on average, a further leap on the 50% increase on the spot market a week earlier. Most industry users are reporting power prices that are double what they were 18 months ago.
We are concerned that the high wholesale electricity prices and uncertainty in the gas market are impacting New Zealand’s export competitiveness. Anna Palairet Fonterra
Ashburton Lyndhurst Irrigation general manager Rebecca Whillans says the company has invested heavily in its scheme operations to future-proof its 240 irrigatorshareholders against soaring electricity prices. Photo: Annette Scott
S FOECT CU OR S
Richard Rennie
Landing big rewards with embryo transfer
The major energy cost surges are coming as the dairy industry gears up for peak spring milk flow, and farmers start to rebalance budgets after two years of double-digit on farm inflation. De Lautour said the fact the price surge extends across electricity and gas supplies indicates the problems causing it go beyond any seasonal volatility in hydro lake levels. They reflect, he said, a major flaw in New Zealand’s ability to adequately plan for its energy needs.
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NEWS 3
NEWS 7
OPINION 19
The excitement of landing a big fish is how Emma Poole describes the reward of landing a healthy calf on the ground from an embryo transfer.
DAIRY 22-30
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