The Weekly Dairy report: Prices fall at auction as autumn production lifts

Good rains have arrived and now the challenge for the drought areas is to keep off pastures long enough to allow a build up of covers.

Some undersowing and regrassing has taken place but with maize yields  down and PKE supplies tight continued use of supplements will be necessary to lengthen the rotations.

Farmers are being warned to watch out for nitrate poisoning after the rains, and to use body condition scores for drying off decision making.

Both fertilizer co-operatives have reduced the price of autumn urea to $645 a tonne as some managers will use bagged nitrogen to boost grass production.

Winter feed is being offered at 25-28.5c/kg dm with the higher rate including labour to shift cows, and good crop availability is reported in the south but shortages in the north.

Work has started on Fonterra’s new $200 million dryer at Paihiatua as this company looks to boost it’s powder producing capacity.

Production is now forecast to be up 11% this season and these surplus volumes could cause further falls in dairy prices.

Nationally average yield per cow is now a record at close to 375kg/ms per head and shows progress being made in genetic gain and good returns are being achieved by better grass management and improved cultivars.

Fonterra was fined $300,000 for errors in it’s whey protein concentrate recall, and will also face much more expensive lawsuits from many disgruntled customers.

They also announced they are repeating the guaranteed minimum price option for a total of 60million kgs of milk solids this new season which on a falling market could be worth a look, for those wanting to reduce the risk of a fluctuating income.

Another big fall for milk commodities at auction has seen prices fall to a 20 month low and drop nearly 20% from the peak as the market reacted to the increased autumn milk flows and an easing of demand from China.

Oceania dairy commodity prices have fallen in line with the auction values with the high currency causing yearly lows for skim and whole milk powders.

Ngai Tahu also announced plans to build its agricultural investments to $1.5 billion with its forestry to irrigated dairy land leading the development and backed by environmental practices overseen by Lincoln University.