One in ten NZ farmers under financial pressure with depressed dairy prices

A New Zealand farm industry group said Wednesday that 11.1 percent of its members are under pressure from banks over their mortgages, as world dairy prices fell for the fourth time in a row at the latest GlobalDairyTrade (GDT) auction.

The overall price index on the Fonterra-run fortnightly auction fell 2.8 percent to 1,890 U.S. dollars per tonne over Tuesday night, and followed a 7.4 percent drop in the previous auction.

Federated Farmers said in a statement that member poll showed more than one in ten dairy farmers were now under financial pressure, up from 6.6 percent in August and 7.6 percent in November last year.

"So far we've been pleased with the support of banks and their long-term view of the dairy industry, but when you're talking about one in ten farmers feeling the squeeze that's a worrying statistic," Federated Farmers dairy chairman Andrew Hoggard said.

Hoggard said that softer demand from China and displaced product from Russia are not helping the situation, and the real issue at the moment is increased production from Europe driven by the retention of subsidies.

Analysts said that New Zealand's dairy industry is facing another difficult year in 2016. The falling prices meant returns to many farmers would come in below the break-even point.