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An updated assessment of dairy sector vulnerabilities

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Low global milk prices are placing dairy farmers under significant cash flow pressure. This article investigates the severity of these cash flow pressures, and the potential financial stability implications if the payout remains low for an extended period. Most farmers are estimated to make cash losses in the current season, compounding cash flow pressures experienced in the later part of the 2014-15 season. Despite some farms with high debts facing considerable difficulties, most farms are expected to remain viable over the medium term. Losses for the banking system as a whole are estimated to be manageable even under a severe stress scenario for the dairy sector.

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  • Ashley Dunstan & Hayden Skilling & Matthew Newman & Zach Mounsey, 2015. "An updated assessment of dairy sector vulnerabilities," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 78, pages 1-14, December.
    • Handle: RePEc:nzb:nzbbul:dec2015:08
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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2015/2015dec78-8.pdf
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    1. David Hargreaves & Gina Williamson, 2011. "Stress testing New Zealand banks’ dairy portfolios," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 74, pages 15-25, June.
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    Cited by:

    1. Doole, Graeme J. & Romera, Alvaro J. & Leslie, Jennifer E. & Chapman, David F. & Pinxterhuis, Ina (J.B.). & Kemp, Peter D., 2021. "Economic assessment of plantain (Plantago lanceolata) uptake in the New Zealand dairy sector," Agricultural Systems, Elsevier, vol. 187(C).
    2. Perrot, Christophe & Chatellier, Vincent & Gouin, Daniel-Mercier & Richard, Melanie & You, Gerard, 2018. "Le secteur laitier français est-il compétitif face à la concurrence européenne et mondiale ?‪," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 364(April-Jun).

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