The Weekly Dairy Report: Banks adjust forecast downwards as milk auction drop knocks confidence

More hot dry weather this week as the central and northern parts of Canterbury dryland farms are now baking dry.

The nights are cooling, and autumn dews have restricted long days for headers for a surprising large amount of crops, yet to be harvested.

Still further south and most of the dairy regions in the north have enjoyed good rains and many are enjoying good production from that extra grass

Rotation lengths are around 25-28 days, as managers look to set up the new season with BCS monitoring, and pasture management.

Bobby calf housing rules are nearing the August 1 deadline, and big orders for regulation pens are being made.

The increased awareness of animal welfare responsibilities for these young animals has seen calf deaths halved.

Irrigated pastures look good, and the Rangitata lake water reserves are being heavily utilized as demand exceeds supply over the summer, early autumn period.

Oceania milk commodities rose again and helped by an easing currency, are (with the exception of WMP) now at yearly highs.

However whole milk powder futures were trending downwards all week, and that followed through with miserable auction results overnight.

The basket of commodities fell 6.4% from the last soft auction  with  powders leading the fall, as WMP ( $2782US) dropping 12.4%, and SMP fearing even worse, at  15% back ($2118US).

The banks  reflected these falling market returns with reductions in payout forecasts that saw the BNZ now at $6.10/kg ms and even the optimistic ASB adjusting 0.50c down to $6/kg ms.

Westland Milk Products have voted in a new chairman in Peter Morrison, as they look to fresh leadership to turn around the co-operatives poor financial performance.

He warns a quick fix is no certainty  and the new leadership team will need to convince the shareholders to hang in there until things improve.

A2 Milk has purchased a 8.2% share of Synlait milk as they look to strengthen a relationship that has become more amd more important for both parties.

About a third of Synlaits suppliers produce 100% A2 product at present, but increasing the supply will be slower to achieve from the other producers Keith Woodford reports, as that will need breeding and purchase to expand volumes.

Things are tough in Aussie too, with the countries biggest dairy processor Murray Goulburn down 20% in supply, as suppliers flee the company for others with better financial returns.