A financial and economic survey of South Auckland town milk producers and factory supply dairy farmers, 1983-84

Abstract

The town milk industry has been linked to returns in the factory supply industry for many years by a pricing formula. While the formula has been changed from time to time, it is basically designed to provide equity between these two groups of milk producers. It is difficult to maintain such equity given that the production systems are so different. For this reason it is useful to carry out an analysis of comparative returns from time to time. Such an analysis is particularly relevant at this time given the examination of the Town Milk industry by the IDC. A survey sample of South Auckland town milk and factory supply dairy farms was undertaken early in 1985. The object was to compare the financial and economic differences between the two types of dairy farms in 1983/84. A further objective was to assess the increased costs of autumn and winter milk production which have to be met on a town milk farm.