The Weekly Dairy Report: Early calving in the north starts well and cow condition on track in the south, but dairy prices still dragging along the bottom

Above average pasture growth rates have boosted saved grass as brassica feeding for cows moves into it’s final phase.

Visually it appears that in Canterbury volumes of crops look over supplied for the dairy sector but this will be dependent on late July August weather and history shows that demand can change fast.

While in the north many farms are approaching calving using grass only without supplements thanks to a lower stocking rate and mild winter.

Many have grass storage and cow condition ahead of the norm, and early prospects look good for calving and early milk flows.

All areas except the east of both islands have had sufficent winter moisture and above average temperatures have made this winter more favourable for stock.

Early calves are now arriving in Northern areas and bobby calf processors gear up for the start with early market signals indicating returns could be back on last year.

However calves with strong Freisian and beef genes have shown strong interest at the saleyards and this looks a more profitable option than harvesting for veal and calf skins.

Market sentiment has changed little, with the future determined by production out of Europe and the US, and stocks on hand through the intervention scheme of the EU.

Export sales have fallen from the US as more is consumed domestically but with the EU's export share lifting 11% and more sitting in stocks awaiting supply shortages, trends from this area at present seem to be most influential in the global dairy market.

Another auction this week will reveal another snapshot of where the market is at, and give farmers an indication when prices will improve.

Last nights stable result, albeit with a small lift in whole milk powders, further illustrated that dairy farmers will have to survive another year of non sustainable returns, and will be at the mercy of the banks as to their future.

Fonterra reports they have made good progress on stocks carried, as volumes held are back on last year, and coupled with some cost savings and more valued added production, management believe they have set the tools for the upturn.

Dairy real estate prices have dropped 15-20% from the highs, but some analysts believe more falls are possible when additional properties are marketed in the spring.

The NZ Super Fund has purchased 7 dairy farms in Southland showing the sector they believe the future has an upside, but critics suggest they have paid too much, too soon.

PKE prices drop again as usage falls, and this in turn has sapped demand and prices for feed barley, which is now the lowest it has been for 6 years.

Westland have appointed their independent director Brent Taylor as an interim CEO, as they  carefully search for the right person to lead this West Coast company out of these tough times.