New milk plant on hold

Construction of the Mataura Valley Milk plant  near Gore has been postponed for 12 months because of funding difficulties.

The $90 million plant was due to open next August:

However, chief executive Chris Shelley said last night company directors thought it prudent to postpone construction by 12 months because delays in closing funding meant a risk of missing the start of the 2009 milking season.

Mr Shelley said commercial production would now begin in August 2010.

The global financial crisis was also a factor in the postponement, he said.

 This is only a posptonment but  there are pretty strong indications the dairy boom has peaked.

Milk companies forecasts for this season’s payout are good by historical standards, but down on last season’s.

Dairy returns are still better than those for beef and lamb, but rising prices for meat are closing the gap which make conversion to dairying less attractive than it was.

3 Responses to New milk plant on hold

  1. rayinnz says:

    It says in my paper “Timaru Herald” that several major dairy farm conversions will not be going ahead because of the credit squeeze
    Same article as that Norgate’s latest deal is looking mighty sick

  2. Sally McIntyre says:

    This little piece was sent to me exactly one year ago

    “My view is that we will have stagflation of even greater proportions and wealth will be stolen from those who think that they have become rich with non productive property. NZ will suffer a worse fate than the
    USA in my opinion as we are dependent on wealthy people coming here from overseas and making us rich.

    The dairy boom will only offer a short term palliative and we will face stiff competition from other supply countries and the world consumption will fall off and people will revert to standard staples for diet such as rice etc. People forget that NZ has had two dairy cycles and that farmers reverted back to sheep or alternative land uses such as cropping. The cows are now $3000 each and it is stupid to buy them when there is zero return on investment. But some people think that they will keep escalating in value. They will have to learn another lesson.”

  3. Steve Bayliss says:

    I would like to learn about the two previous dairy cycles Sally – when dairy farms reverted back to sheep and beef. Can you suggest some reading. Cheers

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