Good point Daytr, possibly a floor on the GDT prices, but where to from here, is the interesting bit that dairy farmers would like to know.
Landcorp has been in the news all week, and perhaps helped by a growing realisation that nothing is certain in the dairy world, the govt is talking with them about their big ongoing plans near Taupo. This is something of a joint venture on the old Fletcher Forests area.
http://www.stuff.co.nz/business/farm...ry-conversions
These new farms look OK from the road, but we're swapping one monoculture (Pinus Radiata) for another (Rye/Clover crop mostly). Even through the recent dairy boom, Landcorp, with its big variety of farm operations, struggled to earn a decent ROI.
Here's a pdf of the 2014 annual report, where it states the asset base is 1.748billion, from which it earned a profit of $30mill, and from that paid a dividend to govt of $7mill. ROI is 1.7%. Nearly 700 staff running 137 farms, and average dividend of just $51,000 per farm in a good year for dairy.
It seems certain to me that they'll have to post a loss over the next year, unless meat/wool returns strengthen. If Landcorp is just a bigger version of a typical cross-section of farming operations, it's saying that these are not highly profitable operations overall, but maybe a long-term game is being played.