July weather continues to put pressure on feed as managers carefully ration supplies as they plan toward calving, but lower than average soil temperatures slow growth on saved calving pastures.
Whilst many are locked into this years feeding systems, advisers suggest feed should be no more than 5% of total farm costs as budgets and stocking rates are meticulously reviewed, and the price of feed grains and pke are falling steadily.
Northern herds have plenty of calves on the ground now as their season starts, but will be very concerned of reports of last years dairy commodity stocks carried over, both here in NZ and powder stockpiles in China.
Many are having to supplement milking cows with palm kernel, maize, and silage to maximise production, but most are planning to grow their own feed this year, and have reduced stocking rates to achieve this.
Last weeks auction result was described as disastrous on another 10% fall, driven by an even bigger drop for whole milk powder, and the ANZ dropped its forecast to $3.75-$4.00/kg ms, and the BNZ to $3.80.
Open Country Cheese also reacted pessimistically with a $3.65-$3.95 figure that illustrates just how far the fall has gone.
The currency did fall on the back of this poor auction, and economists predict further falls in interest rates, as more debt may be the only solution in the short term.
All eyes will be on Fonterra’s 7th August announcement of the advanced rate which will show the markets true position, and determine the extent of the overdraft pressures for the coming season.
Dairy farmers are being urged to use beef genes for non breeding cows to cash in on strong demand for beef, and increase returns from this byproduct of milking.
28 Comments
stockpiles, over bought or undersold
trade and product data
http://www.clal.it/en/?section=stat_cina
middle kingdom industry view ex credit suisse (from Jan 15)
https://doc.research-and-analytics.csfb.com/docView?language=ENG&source…
eg conversations with the sales and marketing team regarding buyers.
https://www.youtube.com/watch?v=kTcRRaXV-fg
http://www.farmingshow.com/on-demand/audio/john-wilson-chairman-of-font…
and not so glum - at 5ers
http://www.farmingshow.com/on-demand/audio/nathan-penny-rural-economist…
and
Fonterra Co-operative Group Shares
FCG $4.660
be quick
http://www.trademe.co.nz/property/rural/auction-920320425.htm
1 The Shanghai Pengxin Group Co Limited (SPGL) intends to restructure the ownership of some of its New Zealand farm assets. To enable such restructure, the Overseas Investment Act 2005 requires SPGL firstly to advertise the assets for sale to a non-overseas person. Those assets comprise:
1.1 ownership of approximately 7885 hectares of predominantly dairy farm land in the North Island of New Zealand, and a conditional agreement to acquire further farm land known as the Lochinver Station in the Central region of the North Island, as described in photos (Table 1&2): and
1.2 rights under a Fiduciary Management Agreement (FMA) to manage SPGL’s 100% shareholding (held through a subsidiary) in SFL Holdings Limited, which through its subsidiary Purata Farming Limited owns farms in the South Island of New Zealand, also described in photos (Table 3). The FMA does not grant any rights to participate financially in SFL Holdings Limited, nor grant any rights to own the shares in SHL Holdings Limited.
2 The North Island farms are owned through subsidiaries by a Hong Kong subsidiary of SPGL, An Yuan Dairy Limited (An Yuan).
3 SPGL is advising that 100% of the shares in An Yuan are available for sale and are offered for sale to persons who are not “Overseas Persons” under the Overseas Investment Act 2005 (Act). The grant of the FMA is also available to persons who are not “Overseas Persons” under the Act. Offers for the shares and the FMA are sought from those persons.
4 Prospective purchasers should note that SPGL reserves its rights to transact, or not transact, on such terms as it sees fit (and that is not obliged to accept any particular proposal). In assessing any proposal SPGL will take account of benefits expected to accrue under its internal restructure proposal.
5 Prospective purchasers should register their interest. They will then be contacted by representatives of SPGL to confirm the outline terms of their offer and to participate in the sale process.
http://www.stuff.co.nz/business/farming/agribusiness/70464860/chinese-c…
http://www.stuff.co.nz/business/farming/agribusiness/70429467/shanghai-…
thing is 002505:CH Hunan Dakang Pasture Farming Company Limited
http://www.dakangmuye.com/en-us/product/ruye
via the brand Theland already claims the business/farms as theirs
Theland has several self-owned pastures situated in the key dairy regions of New Zealand at 40 degrees north, the same latitude as other best pastures in Australia, Holland, and Ireland. With their unique unspoiled natural environment, these pastures are called "the Golden pastures out of the golden pastures"
and chatting about it this time last year
http://www.interest.co.nz/news/71265/key-defends-shanghai-pengxin-inves…
http://www.cninfo.com.cn/finalpage/2014-06-18/64148306.PDF
and document page 19.
it would seem that (subject to school boy translation)
there is a BVI new entity put between a HK holding company and NZ holding company, under which the three land investment owing companies sit (Pure 100, NZ Standard Farm [holding Synlait 73.91% - now 100%] and NZ Pasture Group [Crafar]
funds seem to becoming from a raising by a China domestic entity (part of the group higher up), passed to the BVI entity in return for possibly an asset framework agreement and an equity escrow agreement.
and
http://www.interest.co.nz/news/71234/former-act-leader-and-mp-john-bank…
Walked past a shop in a mid sized rural town the other day. Saw three people talking in Chinese, the shop the were standing in was being renovated. The rest of the town is struggling with shops closing and these Chinese people were spending up large opening a new shop, good luck to them , more money than sense I'd say.
Even $2 isnt so bad as long as there is a quick and healthy recovery ie $5+?
With respect steven, a $2 payout on the back of a $4.40 (or whatever Fonterra's final payout for 2014/15 will be, is bad. Not all farmers are farm owners - 2015 Dairy stats show approx 52% of all farmers are sharemilkers - and they do not receive the full payout but are usually fully responsible for labour costs which continue to increase yearly, if for no other reason than the minimum wage increases.
http://www.dairynz.co.nz/media/1357994/quickstats-new-zealand.pdf
edit: web link
wouldn't help, stuck in a deflationary spiral, overproduction across all commodities. Prices will keep falling look at steel, from Stockman
Namely, that big projects which were in the pipeline when commodity prices and profit margins began to roll-over in 2012, are being carried to completion owing to the sunk cost syndrome. This means that available, on-line capacity continues to soar. The poster child for that is the world’s largest iron ore port at Hedlund, Australia. The latter set another shipment record in June owing to still rising output in mines it services——-a record notwithstanding the plunge of iron ore prices from a peak of $190 per ton in 2011 to $47 per ton a present.
example a
http://www.fwi.co.uk/livestock/china-building-100000-cow-dairy-unit-to-…
example b
http://www.stuff.co.nz/business/farming/agribusiness/10574421/Irrigatio…
get the drift, i could go on all day.
The world is overrun by this sort of nonsense at all levels due to cheap funding costs without responsible recourse to the true capital liability that is exponentially imposed upon citizen's financial resources.
The US has invested $14.7mn in a warehouse facility in Afghanistan that now lies deserted since the Pentagon decided to wrap-up its mission but continued wasting US taxpayers money until the overdue construction was completed, a new audit report reveals. Read more
Watch that beef job Belle
'Multi-year bear market'
However, market bulls may not have it all their way for long, with feeder cattle potentially poised for a decline which could last for years.
While feeder cattle values have been supported by the need to rebuild the US herd from multi-year lows - encouraged by both better pasture conditions and, until lately, buoyant beef prices – the incentive to boost numbers will ultimately wane.
"Other countries such as Brazil and Argentina are also expanding their herds because of high prices," Mr Roose said.
"Ultimately, that will all come home to roost.
"Feeder cattle are going to go into a multi-year bear market," although that "might be six months to one year out".
http://www.agrimoney.com/feature/live-cattle-prices-hit-13-month-low.-w…
http://www.independent.ie/business/farming/cattle-glut-looming-warn-far…
From the Cornwall coast HB looks pretty good, been cold and dry, I wanted to buy some more bulls but they got too expensive so I'm going to offer some free grazing to a mate in Nth Canterbury, where I hear it's super dry. Cornwall is moist most of the time but the pubs are fun, I've been helping a mate do some building on an old barn.
smoke or fire?
The Australian reports that Camperdown Dairy International has secured a 15-year, $9 billion deal to supply powdered infant formula to China, despite still being in the process of buying grazing land and building factories.
Last week the company was granted Chinese accreditation for its tinned formula, which allows customers to trace the product back to the farm using their smartphones.
http://www.businessinsider.com.au/australian-businesses-are-milking-the…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.