The Weekly Dairy Report: Production up, prices down as many herds dry off

Reports suggest northern pasture recovery after the drought is slower than last year with more insect damage and colder temperatures affecting growth.

   More herds are drying off and planning targeted winter feeding to build condition scores of lighter animals by calving

   Operators are reminded it is easier to put on body condition in the autumn than in the winter and not to budget for improvements close to calving.

   Fonterra have reported collecting 31% more milk this autumn than last, as better feed conditions nationally have helped the increase the flow.

   Statistics NZ have also revealed dairy cattle numbers have hit 6.5 million head, all at the expense of the sheep, beef and deer sectors.

   Prices have eased for dairy commodities as China has met it’s short term commitments and buyers are now able to be more selective when they purchase.

   This and the strong currency could see a downward adjustment to this years Fonterra predicted payout to be updated next week.

   The latest auction results yielded another drop, now the seventh in a row, although the steepness of the decline is diminishing. Bank analysts suggest these price patterns are mirrowing the 2012 season when big increases in production produced similar price falls.

   In Europe Ireland is ramping up its production and with quotas due to be removed in April this country has plans for a 50% rise in milk flows by 2020 and will be a strong competitor to NZ exports.

   An unwanted side affect of the dairy boom is the ever increasing rises in costs as analysts suggest that the breakeven milk price has now lifted to $5.26/kg ms.

   This week’s large fine for unsafe Quad bike practices reminds all farmers of the importance of safety in the workplace and the need to update requirements for all participants.