The downturn in New Zealand dairying shows no signs of abating. Despite Rabobank indicating that there are signs of a recovery in the markets towards the end of 2015, the New Zealand central bank in the past few days has moved to play down any hopes of a recovery.

As the Global Dairy Trade (GDT) suffered its ninth consecutive fall, New Zealand milk prices are expected to fall to a ten-year low. Last week, we examined just how the GDT works and who is buying.

This week, we get a sense of things from dairy farmers on the ground in New Zealand to gauge their mood during this difficult time.

Olin Greenan is originally from Co Monaghan and now farms in Waikato, New Zealand.

What’s the mood among farmers regarding milk price?

A lot of the more reactive farmers are in a state of shock. In my opinion, many are very naïve as we saw this on the horizon over 12 months ago. Many are still trying to convince themselves that the market will correct soon. I think they’re partly in denial as the truth hurts because quite frankly heavily indebted farmers don’t know where to turn or those with high cost structure.

Do farmers feel Fonterra is doing enough for them?

Many feel a disconnect between high levels in Fonterra and grassroots farmers. The CEO’s $4m salary did get a lot of attention, particularly when milk prices continued to tumble.

My own opinion is that calling for the CEO’s head on the plate won’t do much to improve the situation and if anything would create even more instability within the co-op. Also news that there are over 4,000 Fonterra employees now on over $100,000 (€60,000) rankled with some. The fact that there were only 1,300 in 2006 probably upset most.

Were the recently announced 500 Fonterra job cuts expected and is it part of a serious cost reduction strategy?

As in any business when times are good, a little bit of complacency creeps in. Definitely a big signal to shareholders that they are trying to rationalise. This was already planned for early August and therefore not a kneejerk reaction to the latest GDT.

What will be some of the consequences of low milk price?

I think it is a wonderful opportunity for New Zealand to get back to what it traditionally did best – converting cheaply grown grass into milk. I think the best thing we can all do is go all grass, once a day at Christmas and this might help reduce supply. The general public has yet to realise the impact to the entire economy. Rural towns will certainly feel the draught. The rural lending will be interesting to see how that fairs. Banks will have to be very careful.

New Zealand native John Lynskey is farming in Taranaki, New Zealand.

What’s the mood among farmers regarding milk price?

Farmers are fairly stunned. Calving is just starting, so they are going to be under huge pressure and can’t afford to be distracted by milk price. I just hope it’s a good growing season; otherwise, I’m concerned how farmers are going to react if they can’t feed their stock. My wife Carole is involved in a Rural Support Network. Suicide is a huge risk.

Do farmers feel Fonterra is doing enough for them?

There are a number who feel as though Fonterra has let them down but this number is dwindling in my experience as the press is reporting more of the global issues that are driving the milk price down.

The biggest concern regarding Fonterra would be that this milk glut wasn’t foreseen and signalled. Fonterra is forced by legislation to take all milk offered to it and expand to accommodate it.

Were the recently announced 500 Fonterra job cuts expected and is it part of a serious cost reduction strategy?

The job cuts are serious and perhaps there are more to come, but everyone is asking are they permanent as sure as hell as there is any sign of an upturn the positions will reappear.

Some of these positions will be covered by contractors at crazy rates. Most service industry staff will be very nervous at this time.

What will be some of the consequences of low milk price?

The lower milk price will have a huge impact on the national economy and will be far-reaching. I believe it will be more about how long it stays down. God help us if we have no marked upswing by the end of the year. I really am concerned about my fellow farmers and any other workers in the industry who are going to be adversely impacted by this.