Farmers who grazed dairy stock over winter may have to wait to be paid as falling dairy farmer incomes start to impact.
The Ashburton-based dairy livestock company, South Island Dairy Farmers (SIDF), has written to clients saying they will pay farmers who have grazed stock once they have been paid by the owners of the animals.
SIDF managing director Paul Brown said in the letter obtained by the Otago Daily Times, that the dairy industry's financial situation, was forcing banks to "apply restrictions" to some of their agribusiness customers"Hence it is becoming apparent that some clients, and this includes long-established clients, are struggling to meet payments for the 20th."
Mr Brown said SIDF would pay August 20 grazing transactions to graziers once the company received payment from the stock owners.
Traditionally accounts had been paid by the 20th of the month and he said SIDF paid its clients also on the 20th of the month.
This was the first time in 24 years such action had been considered, Mr Brown said.
"I reiterate that most payments from SIDF will proceed as normal over the 20th, but each transaction will be considered on its own merits."
SIDF specialises in the dairy industry and has stock agents from Southland to North Canterbury Sources in the dairy livestock sector said that while dairy farmers cash flows were tight, winter grazing contracts had generally gone well with few defaults, if any.
Plummeting milk prices and cost structures based on higher payouts had hit some dairy farmers hard, but this was the first tangible sign of farmers struggling to pay their bills.
Mr Brown did not respond to calls yesterday.
