Lack of rain in the last two weeks has accentuated the dry in the east coast of the South Island, but good soil moisture reserves in the North Island, West Coast, and Southland have seen good grass growth rates continue in sunny conditions.
Dryland farmers in the south are rapidly moving into drought management strategies not seen here for a good few years, and some irrigation systems are running low.
Mating is finished in most areas and next years calving is set as farmers look to concentrate on feeding cows through what looks to be an increasingly dry summer.
Little evidence yet, as to the cause of winter cow deaths grazing Swedes in the south, even after Dairy NZ surveyed farmers looking for more information.
A big increase in the use of fodder beet as the brassica of choice in Canterbury southwards is evident, as mangers learn the skills of how to grow and feed this forage, and utilize it’s potential production advantage, and quality attributes.
Rabobank reports it could be well into the second half of 2015 before the dairy recovery starts, and the Aussies warn that NZ’s China driven milk boom is coming to an end, as competition for this market builds.
Some hope that we have reached the bottom with results of the latest milk auction lifting 3.65%, although in an offering reduced of volumes the main commodity, whole milk powder lifted the least.
Fonterra announces that it will offer Australian skim milk powder onto the global dairytrade platform from the 20th January, as this system of sale has now become a credible transparent facility for the disposal of dairy commodities.
Southland dairy farm prices hold in the downturn, although less listings are now being posted, and it is taking longer to achieve a sale.
Polytechnic educators have created a new dairy worker qualification as the industry seeks to upskill workers to address shortages of labour within the sector.
Dairy prices
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China re-entering the world dairy market with a degree of serious intent will be the sign that international milk prices have bottomed out, according to DairyCo’s senior dairy market analyst Patty Clayton.
“And this will not happen prior to this year’s milk flush in the northern hemisphere, she said.
http://www.agriland.ie/news/china-holds-key-future-tenor-international-…
a funny thing happened on the way at the bank........
our experience of CAP related matters/markets found them to be soul destroying.
To see these fx johnnies "get in on the act" shows the special calibre needed therein to boot.
Gribble, whose family has toiled on this land for three generations, works more than 13 hours a day and uses the highest-yielding breed and most up-to-date farming techniques. Still, he barely scrapes a profit as a glut in supply and slackening demand push the price of milk below his production cost. If it weren’t for the subsidy he gets from the European Union, he’d have to sell his Holstein Friesian cows.
pastural dairy grazing systems - not for everywhere or everyone..
Eric Watson, the expatriate New Zealand businessman....., is changing tack with his planned US dairy farming venture, with plans to merge the company with an American iced tea maker.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11383681
over before it started maybe..
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=CAGZ
click on the link "Latest 10k"
Our principal focus was to use our intellectual property in forage and animal sciences to improve agricultural yields. The Company was formed to develop, adapt and implement grazing-based farming systems in regions of the world where the geophysical and climatic conditions are suitable for a pasture-based model. While the potential for the pasture or grazing model is significant in many of the world’s developed and developing economies, the systems are highly specific and require significant adaptation and modification to be successful. We had identified the global dairy industry as a primary opportunity in which our systems can be applied to improve yields on land and drive cost-base efficiencies.
We had been in the process of attempting to obtain land development financing backed by the property we owned and operated to support our working capital needs and implement our business plan, but due to the performance of similar types of farming operations in the region, as well as the general economic downturn, financial institutions were unwilling to provide such financing. As a result, we were unable to obtain the necessary funding to support the implementation of our business plan. Accordingly, we began exploring all financing and strategic alternatives available to us.
During 2010 through May 2012, the Company disposed of approximately 3,635 acres of land, constituting all of the Company’s property which it had planned to use to deploy its pasture based dairy and beef business plan. We used the capital received from such sales to support our working capital needs and retire certain of our outstanding debt to reduce our interest obligations.
We have refocused our efforts to seek alternative strategic opportunities in all industries and regions (whether or not related to our prior business plan) in an effort to maximize shareholder value. To this end, the Company has in the past had, and may in the future have, discussions with potential merger candidates wishing to become publicly traded. There is no assurance that the Company will be successful in any of such efforts.
Our current plan is to seek, investigate, and if such investigation warrants, acquire one or more operating businesses desiring the perceived advantages of a publicly held corporation. We will not restrict our search to any specific business, industry, or geographical location, and may participate in business ventures of virtually any kind or nature.
and
For the period from June 3, 2009 (inception) through December 31, 2013, we had a net loss of $4,853,078. We did not generate any revenues during this period and are a development stage company. Our operating expenses of $3,228,847 for the period from June 3, 2009 (inception) through December 31, 2013 consisted primarily of legal, accounting and consulting fees of $1,083,878 as well as employee and general consulting expenses of $611,615 and other general corporate and administrative expenses of $1,533,354.
Got the old 'Dear Cocky' letter from my meat company today.
Dear Shareholder/Supplier
· Disappointingly, we have had to reduce the lamb schedule to levels below price indications provided during the October shareholder/supplier meetings.
These meetings indicated prices similar to last year with some possible upside.
The current cpk schedule for lamb (14 kg – 23 kg) is $5.20, excluding any yield premium compared to $5.25 for the same time last year.
While demand is generally sound, some markets for lamb are under pressure with returns lower than those anticipated in the price indications.
- China is resisting volume offers with inventory held in China yet to flow into the market resulting in slightly lower prices.
- The reduction in oil prices has dampened consumer confidence in the Middle East with sales slower and pricing down.
- Caution continues throughout Europe despite indications of improving economies, with demand remaining subdued. However, pricing in the UK is similar to last year and North American demand is strengthening.
While the US dollar is 4% lower than this time last year, the pound and euro are above.
- Pelt returns are 50% below last year which equates to $5/head below this time last year. Our price indications in October assumed some improvement in pelt prices which have not eventuated. Other co-products including casings and renderables have also experienced price reductions.
While generally markets are sound, the above noted factors suggest similar pricing to last year may be difficult to achieve and there is potential for schedules to move slightly lower.
From what we understand, the China buyers never expected to buy a lot of stock into inventory, What they bought last year they thought they would sell the following month or so at often a higher price.
Given there are no fewer people in China, it seems that the man/woman in the street has pushed back against both higher prices and volume (of lots of things - there was no dirty pipe in the meat works [grr..]).
bull/China shop:
I want to double it in the next five years and then probably double it again. It's been our rate of growth. So I want to continue with that so long as I'm capable. We're chasing a rainbow and the rainbow has no end.
but he is right in one sense, present values assume production must be near doubled mid term.
US Department of Agriculture
"International dairy prices have plummeted due to increased global milk production, lower import demand, the Russian ban on imports of dairy products from several major producers, and a strengthening dollar.
"This precipitous drop was particularly evident in the prices of whole milk powder which after lingering at around $5,000 a tonne fell sharply by over 50% since January 2014 and are now reportedly trading as low as $2,300 a tonne FAS.
"For 2015, the forecasts are drawn on the basis that the Russian ban will be lifted in early August and that the Chinese will remain major purchasers of whole milk powder, albeit at a much more modest pace. In fact, the forecast calls for Chinese imports of whole milk powder to decline by 12% as China's economic GDP growth is expected to slow.
"This suggests that dairy prices will be under pressure during 2015.
"Farmers will be facing reduced margins and milk production among major exporters is expected to slow and expand by only 1%. The speed at which dairy prices recover will depend on drawing down stocks that will have accumulated in exporting and importing countries."
http://www.agrimoney.com/feature/dairy-prices---will-2015-prove-as-down…
On the otherhand
http://www.sharechat.co.nz/article/5fb5a0a2/rbnz-sees-44-bounce-in-whol…
Looking how 2015 is shaping up I find it hard to believe milk will bounce back faster than the world's economy is looking to do (several years). On top of that the EU has? / used to have milk mountians I wonder what happens if it decides to increase exports by dropiing prices? However everything seems so un-predictable short term, who knows.
well a/the bounce might be to somewhere else (rather back from whence it came)
The Ministry of Agriculture is launching a series of urgent measures to help dairy farmers who have been suffering from plunging milk prices.
According to an internal circular released by the ministry on Wednesday, with increasing numbers of dairy processing companies cutting or halting collections of fresh milk, farmers in some regions have been pouring milk down the drain or even killing their dairy herds.
The circular is instructing poultry and farming departments at all levels to develop urgent measures to help dairy farmers sell their fresh milk.
The ministry said it is urging dairy processing companies to closely monitor their sales of fresh milk and plans to offer subsidies to dairy farmers.
http://www.cs.com.cn/english/ei/201501/t20150109_4613349.html
The latest stories from Shandong followed the same trend reported late last year from neighboring Hebei province, where dairy farmers sold milk cows for only 6,000 yuan (US$965) per animal, despite having initially purchased them for 16,000 yuan (US$2,575) each, the newspaper said.
http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1102&MainCatID=&id=20150107000036
and
The farm prices of milk have dropped from 6 yuan (US$0.96) per kilogram in 2013 to 3.9 yuan (US$0.62) in September, while some farmers in Shandong and Qinghai provinces said prices have dipped further to only 1.6 yuan (US$0.25) per kg at the end of 2014.
- call that NZ$3.50 to NZ$4.50 a kg, using fx .78 and ms range % of 7 to 8 to 9.
and
While Wang suggested that the government should introduce tax incentives for companies sourcing locally, Song said that China should establish a milk-powder reserve to relieve the burden on these businesses, which are cash-strapped because of their huge inventory.
Whats left of it.
There have been huge increases in milk production, technology improvements have spread rapidly.
http://www.statista.com/statistics/268191/cow-milk-production-worldwide…
Compare the production stats in your link Aj with the cow numbers and it gets interesting. I note NZ is not on the chart in this link though in 2012 we had 6.5million dairy cows which should have put us in number 10 spot.
http://www.dairyco.org.uk/market-information/farming-data/cow-numbers/w…
a worldwide collapse in dairy values, compounded by a Russian food ban, was having a "catastrophic impact" on the milk price.....
http://www.bbc.co.uk/programmes/p02gr5q6
Over 1,000 British [England, Scotland and Wales] farmers will not be paid for their milk on Monday because of a financial crisis at the dairy co-operative First Milk.
First Milk told farmers that Monday's cheque and all subsequent payments - will be delayed by a fortnight.
The National Farmers Union president said news of the deferral had made members "extremely anxious".
But a First Milk spokesman argued the move would "put our finances and our business on a stronger platform".
First Milk is one of the UK's largest dairy farmer co-operatives, and runs a number of milk production facilities across England, Scotland and Wales.
As well as withholding money from farmers for a fortnight, the company announced on Thursday it would increase capital levy contributions and recoup extra capital from its members.
http://www.bbc.com/news/uk-30771288
Deflation is rocking on . Oil down to $46.
http://www.thedailybell.com/exclusive-interviews/35987/Anthony-Wile-Dr-…
To answer your question, the central bank does not "keep" interest rates low. In fact, it "pushes" them low through open market purchases of government debt, which increasesthe bond price. The other side of the coin is the simultaneous decrease of the rate of interest. Of course, the purpose of the exercise, on a Quantity Theory argument, is the fomenting of inflation ? not deflation. The trouble is that the central bank does not know what it is doing. It sows inflation but reaps deflation. Its monetary policy is counterproductive, to put it politely.is this an opinion or signal of policy response message to the guw?
The White Gold Rush may well be over as far as China is concerned. But there are other valuable markets in the Middle East, Latin America and Southeast Asia which may provide the demand drive for the future.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11385955
as close as comment on elected govt policy
The economic forecasters reckoned the incredible demand from China for NZ dairy products was consistent with the Chinese rebalancing story.
But the crucial issue facing the NZ sector is that China is actively seeking to reduce its reliance on ou r dairy industry.
which is a step for the Auckland Herald. :)
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