The Weekly Dairy Report: Dairy prices stop falling, milk volumes at record levels, too much rain, not enough sun in the South

For the first time in nine auctions, the overall globaldairytrade index rose. It was up +0.9% in US dollars (but down 1.75% in NZ dollars).

Better prices for cheese and wholemilk powders drove the increases, small as they were.

Volumes offered were a third higher that for the same auction a year ago.

DCANZ has reported that milk production for April was 33% higher than the drought-affected month a year earlier. The full season production will likely be at least 7% above the previous best two years ago.

On the farm, more unwanted rain sees the whole country at field capacity or water surplus, and the South Island is also well behind in average sunshine hours.

However with good reserves, plentiful winter feed and grass growth normal for winter, animals are coping with the wet as temperatures in the north are reasonably mild.

Managers are being encouraged to monitor cow condition over this period and only preferential feed animals behind the 5 BCS pre calving target.

The early calving mobs in the north are being supplementing with magnesium daily for 2-3 weeks pre calving to reduce milk fever risks.

Latest USDA global milk production estimates put volumes up 3% on last year but most analysts predict future demand will cope with this increase.

A continuing concern is dairy debt, with the average farm now amassing $3 million of liabilities and the Reserve Bank lifted the OCR this week.

Commentators are predicting more interest rate rises to come, right up until the end of the year and with income down and costs up, profits are sure to plummet.

The Federated Farmer/Rabobank farm employee survey revealed dairy workers annual pay was $46,017, but they had to work a 51 hr week to earn this, and over 75% had accommodation supplied.

Of a concern for the dairy sector is that employees only stay for an average of two years which is half what sheep and beef workers commit to, and reveals the need for employers to look for ways to create more enjoyment in the workplace.

Fonterra was fined $150,000 by NZX for disclosure offences over the botulism scare as the consequences and handling of this affair refuses to die.