10 Feb 2009

Banks urged to ease lending for dairy farming

7:49 am on 10 February 2009

A dairy farming leader is calling on banks to ease back on lending restrictions which he says are hampering normal trading activities in the industry.

Banks have tightened up lending for further dairy conversions or farm expansion in response to falling milk prices and the international credit squeeze.

That has also affected the price and demand for dairy cows, which have plunged after being boosted last season by record milk prices and the rush into dairying.

Federated Farmers dairy section chairman Lachlan McKenzie said the banks' change of policy on lending is adding to the uncertainty in the dairy cow market.

Mr McKenzie said the policy is preventing people who have bought a farm or want to go share-milking putting a deposit on a herd of cows.

He said reports of renewed overseas interest in heifer exports from New Zealand might help to underpin the dairy cow market.