The Weekly Dairy Report: National and global reductions in milk volumes is the driver behind recent dairy price lifts

More regular rain in the dry South Island eastern regions has improved soil moisture levels and reduced the continual need for irrigation water.

In the north things are now drying out after the big wet but the production peak passed early and milk flows are well back on many farms

Canterbury drillers however report aquifers are still low and if the summer ahead is dry, water reserves could be tested, although in the southern regions of the province, levels have improved.

Plentiful feed dominates  in the South Island and while the silage makers are busy, the short time between showers has made it difficult to get rain free hay.

Nationally October milk flows are down by 6.1% on last year, and even more for Fonterra, which some analysts believe shows the big company is still losing market share.

Globally the EU's milk production fell for the fourth month in a row, in Aussie flows reduced by 11.4% in October, and with Chinese domestic production also fallng they have responded by importing 15% more milk powder due to low stocks.

Managers at present are focusing on pasturing quality that is naturally reducing with seed head emergence, and this should be removed before rotation lengths are widened.

The $6 forecast by Fonterra has lifted farmer confidence, but advisers urge managers not to lose the cost efficiencies they have worked hard to achieve during those tough financial times.

Synlait has followed at the same rate after a very successful year financially, but Westlands woes continue and they faced angry shareholders this week after announcing a $5.30-$5.70/kg/ms forecast.

The lighter stocking rates now carried will create their own challenges associated with pasturing planning, and the focus needs to be fixed on the farms performance goals.

Up north water issues associated with the Healthy Rivers Plan change have disrupted recent rural real estate sales, as prospective buyers are wary of the new nitrogen reference guidelines and rules that may restrict increasing production.

Rabobank NZ reports that their impaired assets are up 21% in September and will be pleased with the milk price lift, as some of the heavy indebtedness will be in the dairy sector.