The Weekly Dairy report: Fonterra leads the payout rise and grows it's processing capacity

DAIRY

Some rain has been helpful to areas of NZ but the regions of western Northland and the Waikato are still in the grips of a very dry period.

Many are drying off poor conditioned cows and going to once a day for the milking herd to preserve pasture that has also been ravaged by cricket infestations, ryegrass staggers, and very hot weather.

Dairy advisers are suggesting feed budgets should be planned now through to calving and early securing of supplements is financially prudent.

In the south the Lincoln University dairy farm is finding that producing milk with N restrictions and without Eco N comes at a cost in the form of extra silage and getting the balance right of striving for production potential and minimizing nutrient loss is challenging.

Fonterra announced processing growth with plans for a $32 million expansion of it’s Eltham plant to produce sliced cheese, and in Waitoa the new UHT milk processing plant is ready for commissioning.

Open Country Cheese has told farmers to expect $8.50/kg ms this year and Westland Milk Products looks at a Chinese subsidiary offer.

And Fonterra has trumped that with a $8.75/kgms payout, inclusive of dividends and this increase from the previous level is predicted to inject another $500 million into an already bouyant economy.

The latest dairy auction prices eased on the back of falls for butter, cheese and AMF but milk powder prices held at historically high levels on increased volumes offered.

Latest Oceania pricing shows slight easing of all commodities listed other than butter, which lifted slightly but still at levels that reflect the optimism in the predicted payouts.