The Weekly Dairy Report: Pleasing compliance results in the south, and added value products rise sharply at auction

DAIRY

Some rain (but lots of wind), for a large part of the North Island and the top of the south will be helpful but its influence will be determined by follow up moisture.

Most areas are recording reasonable pasture growth for this time of year and predictions are NZ’s milk flows are 3-6% ahead of last years figures.

The season has allowed good replenishment of feed reserves in the form of silage and hay, and crops for winter and summer have grown well.

But late January and February are the traditional summer dry times so advisers are urging farmers to cull dry cows early, lengthen rotations, and feed supplementation when shortages occur.

Signs that progress is being made with working with the land were seen with monitoring by Environment Southland showing a pleasing increase by farmers to achieving full compliance and the lifeblood of that region, the Mataura River awarded the most improved river at the NZ River awards in Wellington.

Ngai Tahu believe good sustainable dairy production is achievable with protection for the environment, and to ensure it is done properly in its Eyrwell development, is monitoring nitrate movement with 40 lysimeters on 3 pilot farms, and with the help of Lincoln University developing best farm management practice to eliminate groundwater contamination.

The earthquake in the lower North Island saw cow milkings disrupted, milk transferred from the local plant at Pahiatua to Hawera and some milk dumped into effluent ponds. Still reports of some farmers operating without emergency generators for power cuts which given the value of their product which could be lost, seems a poor risk covering decision.

The USDA report corn and wheat prices have fallen sharply which will be a boost to profits in it’s shrinking beef industry and should stimulate global milk flows in the future. This country is rapidly increasing its export milk volumes and with low feed and energy costs predicted should be able to increase production at low cost and be competitive on the world market

Steady Whole Milk Powder and Cheese prices were reported in the Oceania region by the USDA but Skim Milk Powder and Butter values lifted.

At the latest auction a new trend emerged which should give some heart to owners of units in the Fonterra Shareholders Fund, as added value products lifted in price significantly while a reduced offering of powder product values were stable.

As part of the package of added value products offered, butter, cheddar, milk protein concentrate and rennet casein lifted in value by between +4% and +10%.