The Weekly Livestock Report:Another huge price spike at dairy auction, processors lift milk payout predictions but lamb weak, wool steady, and beef prices moving at last.

DAIRY

There has been no significant rain for the driest areas and reports reveal that supplementary feeds including PKE are now in short supply.

Many farmers have eaten into their winter feed supplies and now April rains will need mild conditions to create significant growth.

Lack of stock water is a serious problem in some areas and with the widespread nature of the drought soon stock will have nowhere to go.

Farmers are being urged to undersow pastures now, even into dry soils so that as soon as moisture arrives a strike will be quick as with winter approaching it's a race against falling temperatures.

The dry conditions should have seen all effluent ponds emptied in ideal conditions to allow this waste to be absorbed into the soil without creating  leaching issues.

Fonterra announced their 6 month results with a 33% profit rise and lifted the projected payout by 30 cents/kg ms.

Dairy auction prices have hit record levels on lower volumes, trumping the rising NZ$, as a reduced number of buyers secured the scarce product offered. Westland also strengthened their payout predictions to between $5.70-$6.00 and Synlait entered the unlisted market to increase their capital so they can payback some debt.

Westpac have revised their 3 year predicted payout figures into the  $6.60-$6.70 range as a positive outlook for the dairy expansion.

With the drought effect often taking two years to be flushed from the system these positive price outlooks will give farmers confidence to invest in expensive feed costs to maintain their herds in the hope of a better production season next year.

More processing competition will enter the market with Chinese infant formulae manufacturer Yashili International getting approval to build a plant just south of Auckland.

LAMB

Still no movements from the autumn export schedule lows, as processors await Easter sales performance to see how the market will follow from here.

A lift in local trade schedules in the north indicates that quality animals are now getting hard to find as most have quit stock down to bare breeding numbers in response to the widespread drought.

With chilled lamb demand still strong, winter and early spring supply could be a major issue and those with irrigation or suitable winter crops will be in a strong position to capitalise on this shortfall.

Processors are now active with early winter contracts as they endeavor to maintain their loyal customers with chilled product even in difficult times.

Pelt prices lifted sharply by 16% during the March month and will help offset the lack of demand for higher priced cuts that are holding schedule prices back.

Lack of follow up action in other parts of the country since the Gore meat industry meeting is disappointing, as support for significant industry changes requires momentum if progress is to be made.

Analysts suggest the ideas of a "Fonterra like" structure for the meat industry is an unrealistic goal, but it is good to hear processors are at least communicating amongst themseleves looking for a solution as they struggle to survive.

Store lambs are selling stronger in the south where irrigation options aided by specialist crops give some farmers more options to capitalise on the drought to their advantage.

WOOL

Wool prices again maintained a steady trend as demand from China continues, amid fears that a big falloff in supply because of the drought will soon affect the market.

The next NI sale has 26% less than was anticipated and industry estimates suggest wool production could be down 5% next year.

Lambs and mid micron wools are at a similar level to last year but crossbred wools are 73-100c/kg behind and are stable at these levels.

Manufacturers of fine wooled outdoor clothing are running short of suitable 18-24 micron wool in NZ as demand outstretches supply and they may have to source product from overseas markets.

The opportunity to take advantage of this demand seems limited as retired leasehold land has been removed from the merino range and with it stock numbers, and dryland mid micron areas have been affected with the drought and the downturn in lamb prices.

BEEF

Another week of low beef schedules as record numbers of cows have been slaughtered in NZ over the past month. Export and local trade beef schedules have however lifted in the north as quality heavy animals are now getting hard to source and demand could be very strong by the spring given the widespread nature of the drought.

Calf sales are now in full swing in the south and prices are expected to be back but not as much as in the north.

Overseas researchers looking for ways to control Foot and Mouth disease have had success with a synthetic vaccine that could be the "holy grail" for global disease control and give hope to those countries that have regular outbreaks.

DEER

Deer Industry NZ will see a leadership change with Mark O'Connor leaving but optimistic investment, confidence, and growth are set to return.

The NZ industry has a truly competitive advantage over other countries and with young optimistic new leaders and a supportive "industry approach" he believes there is a great future for this sector.

The progress made in reducing the dependency on the German venison and Korean velvet market is now significant, and the now diversity of destinations for our products at small volumes should allow the steady price returns to be maintained.

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Here are some links for updated prices for
- lamb
- beef
- deer
- wool

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