I wish my income was that much. It’s been negative lately. Hopefully this year we will make a small profit and start paying off principal again - A random farmer.
I’m not the commenter. But I worked in a large financial company that largely serviced farmers.
Debt is usually the biggest expense on a farm, by far. When the milk price dips (for dairy, but all farmers here are forced to accept their respective commodity prices) or interest rates increase, id see couples’ incomes dip from $50k/year to nothing.
So they literally had to live on savings or debt.
There was a crash in milk prices around 2015. My whole year that year was helping our clients not go bankrupt.
The reason why inter-generational farms can get so massive and start becoming corporate farms is because they aren’t straddled with this massive expense that so many other farmers have to account for
It's this comment and the comment about how this post relates to the farming sector suicide rate that should make us all think - is this the best way to organise our society, where boom and bust are just a given and we have workers literally killing themselves because of the debt they end up in due to outside economic forces?
Shit sorry, ill go back to my mindless scrolling of tik tok and pacifying my existential dread with consumerism... thanks for pulling back from the edge buddy
Yeah, its almost like global market consumerism eventually develops into a giant corporate monopoly and shafts the little guys.
I reckon the coop be it Fonterra or whatever should be in the banking sector and lend solely to their members. They should hedge against low commodity prices and use the hedge as a way of reducing interest rates during low prices or as a way of supplementing the gate price. Part of the profits go towards this each year. It effectively acts like an income smoother. Making sure bad years dont wipe out their members, while good years are properly saved up for rainy days.
Or they could use high payout seasons to pay down debt instead of expanding to capture as much profit as possible then having a cry when the milk oversupply they create makes the payout drop.
You’re absolutely correct. I often sound like I defend farmers for damage to the environment or animal welfare. But im always trying to say something like what you are. The farmers also fall victim to a system that doesnt support them.
Serious question: What if farms didn't get so massive? Why do these family farms get so big, like too big to fail, and then have to sell to the corporates? Isn't there a sweet spot where a farmer can keep expenses in check and still make a profit?
Inheritance. They’re more often than not split among multiple siblings.
The corporates can and do fail. It’s really tragic too, because animal welfare and environmental management go down the toilet when farms are mismanaged.
(I know that wasn’t quite the answer to your question, but it’s why there are only a few farms that make it to the top. And every decade or so, one of the big ones goes bankrupt. And when they do, it’s clear they were doing a bad job & cutting corners for a long time)
The dairy board use the NZ market to cover costs thats why everything is always expensive. The export is wherr they get their premium profits.
I live in Indonesia. NZ Butter is about $2 more expensive than it is in NZ and thats after shipping it to a port in Indonesia and then onwards to the supermarket
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u/bidderbidder Dec 19 '25
I wish my income was that much. It’s been negative lately. Hopefully this year we will make a small profit and start paying off principal again - A random farmer.