As the new year starts, the weather has been giving us mixed messages, with some areas getting good rains, while the driest areas are now more southerly based with little moisture recorded from Southland to North Otago this year.
The North Island has been more fortunate feed wise with pasture growth rates still in the 40kg dm/day region, and this delay to the El Nino outcome is very welcome, ensuring production targets are not compromised early.
In the dry south areas cooler temperatures have helped utilized the recent moisture and forage crops have been boosted significantly by the recent rain.
More prime bulls are being seen in the saleyards as the mating season concludes and early mated mobs will soon test their joining success with a preganacy check.
Regular monitoring of dry stock is important as quickly changing feed conditions over the holiday break can affect liveweight targets and future production potential.
Milk production nationally continues to ease as lower cow numbers and reduced feeding costs has restricted milk flows, but Fonterra report they have sold increased volumes of further processed products in December, and stocks held are at a similar level to last year.
Facial eczema monitoring has started in northern regions and low levels of zinc dosing into water supplies is useful to prepare for increasing spore counts.
The first auction for the year disappointed with increased volumes offered dragging down prices by 1.6% into a global market with plentiful supplies, and questions are still being asked whether the $4.60 payout can be achieved.
Reports suggest dairy farms for sale numbers are increasing, with 64 farms on the books in Southland and buyers are scarce.
Dairy prices
Select chart tabs
14 Comments
I am pretty well connected in the dairy industry in the Waikato, and I can say there are a lot of very scared people out there, and a lot of farms being sold that are not going on the market. Some of the larger farms are getting outside investors to buy shares of their business in order to get quick cash to stay afloat a while longer.
I know some dairy farmers have been told that if the payout drops from $4.60 the bank will be calling in their loans so the stress some guys are under is huge and they dread the next payout announcement because the banks are waiting to strike.
There is worry about the El Nino too, silage production in some areas has been well below normal due to a bad spring, and there is a good demand for bales but not many people willing to pay good money however.
Many farmers are calling it a green drought because while the grass is green, there is no real growth in many areas.
This winter will be grim, particularly if the El Nino bites us.
Any words on the street regarding the Fonterra representation review?
I'm skeptical of the view that the board need to further isolate themselves from shareholders, in the guise of differentiating governance (board) from representation (shareholders council). To me it seems unnecessarily complicated,expensive, and another nail in the coffin of the cooperative model which works to serve primary producers and their communities well.
In no way does the shareholders council represent my ideals and views on the purpose, direction and management of Fonterra, and talking to other farmer shareholders, I get the impression I'm not alone in my thinking.
You are not alone in your thinking regards shareholders council Omnologo. ;-)
Regards the review. I haven't seen any detail yet but the southern folks I speak to want a smaller board but I have yet to hear that from my northern mates.
How's your season going? We are in a bit of a 'green drought' in Southland and could really do with some decent rain.A mate in South Waikato said that they have done three cuts of supplements so far, whereas they would usually only do one or two in a good year. But they are feeding off their summer crops (early) because they have matured early and are going to seed. These crops were their 'drought protection'.
Greetings CO, I hope all is well.
We've been lucky with a bit of rain over New Year, prior to that it was getting dry, following a cool spring. I don't know about South Waikato, but those with surplus grass west of Taupo, either feed a lot of imported supplement or have runoffs. The rain at opportune times has done wonders for both winter and summer crops, no insect pressure yet, however as you know , ten days without rain on the plateau is a long time.
I just read Keith Woodfords post, but don't understand why the need to go non-seasonal, when all our competitors already are? However if only we could promote and leverage the pasture based attributes, why doesn't Keith speak more of this?
I wonder sometimes if Keith has a vested interest in the dairy barn business as his constant promotion of them makes no real sense. ;-) Especially when there are farmers out there doing quite well thank you, from non barned systems.
http://www.stuff.co.nz/business/farming/dairy/75883078/dairy-farmers-st…
I am also aware of people using the 3:2 system permanently from January onwards in areas that can be prone to dry in the Waikato.
(For those who are unaware of the 3:2 system it is explained here http://www.stuff.co.nz/business/farming/75882460/three-milkings-in-two-…)
Capex aside surely there have to be benefits to a barn-biogas system - you can generate electricty/process heat, improve effluent fertility and spead all effluent evenly on the farm. Not to mention more milk. Disclosure - building one at moment.
Though I agree the "free range" grass system has its benefits too especially from a marketing pov (if captured).
profile - My problem is with 'expert' commentators saying barns are pretty much the only way for the future. They are usually environmentally neutral - and create more P loading - if herd size has been increased - which if you are in a P limited catchment has the potential to make water quality worse.
We have an all farm effluent spread system. ;-) We spread effluent according to annual soil tests as the 'old effluent' paddocks have quite different soil fertility than the rest of the farm.
I was interested in the bio-gas option (covering the effluent pond - not using a barn) but have been told a farm of our size <450cows is too small to make it financially viable. Especially as we employ 50/50 sharemilkers.
The NZ Farmer ran an article (Jan 11 pg 15) on barns. What was particularly interesting to me was the stats of the Southland 2 farm. 550 cows 1234kg/ha with the barn. That farm isn't too far from ours and we do that plus more per ha from basically an all grass system.
I like how our industry isn't a 'one system fits all'. Each of us is free (within regulations and policies) to farm in a system that we feel comfortable with.
I understand that Synlait pays a premium for grass only systems and Guardians won't accept from farms that use PKE. While it would be great to see Fonterra pay premiums for such, just how that would work in practice, with such a wide spread supply base could be the issue.
I'm curious - your herd size? North or South Is?
Good luck with your new system. I hope you will comment in the future on how it is all going, as bio-gas has potential. :-)
Yep needs to be bigger herd to work and helps if you can use process heat. We plan to package/retail milk so greatly helps economics. We not in NZ , I'll keep you posted. Interestingly I'm seeing a few tunnel ventilated barns going in to low elevation tropical zone with ok production and pregnancy rates. Early days but if it takes off there will be milk produced where once thought impossible economically with HF cows. Interesting times.
With P loading could possibly sell the >1mm solids as compost.
Meanwhile, the world is still awash in milk. Dairy
product prices in Europe are slipping and
manufacturers are offering SMP into intervention
storage at an accelerated rate. European output of
skim milk powder (SMP) in January through October
was up 8% from 2014. Butter production over the
same period was 3.3% greater than the year before.
Milk collections remain high. Irish milk output
totaled 362.6 thousand metric tons (nearly 800
million pounds) in October, up 48.1% from the year
before. The Dutch managed to grow output by 13.8%
from a year ago in October and by 16.6% in
November. New Zealand milk collections dropped
2.1% on a year-over-year basis in November, putting
season-to-date collections down 3.1% from a year ago. Ireland and the Netherlands more than offset year-overyear
production deficits in New Zealand and California, augmenting a continued global surplus amidst lackluster
demand.
Omnologo
I am more than happy to argue for pasture-based dairy systems. They provide the basis of a cost efficient system. However, in the international market place, so far there have been minimal premiums for dairy products produced under pasture systems. The Synlait- Munchkin pasture-only system (25c/kgMS farm gate premium) will be interesting to watch and see what premium the marketers can obtain at the other end. Unfortunately it is very hard to make a value-add dairy business work without a steady year round supply of fresh milk.. And building a barn for wintering can still be consistent with pasture-based farming. As for my own interests in barns, it is no secret that one of my clients is Calder Stewart who amongst other things do build barns. I disclose that regularly. But they came to me because of my interest in housed cow systems, not the other way round. And they would not be so silly as to suggest to me what I should say. You are right: barns will not be for everyone, But in much of the country it is hard to see a long term future for dairying unless we can get the cows off the paddock in the winter. So I am suggesting that off-paddock wintering, non-seasonal production, and value-add products are part of a package. However, the debates on all of these issues are not going to be resolved quickly. And people who build barns but don't change their overall management system are not going to succeed. So there will be failures as well as successes.
Keith Woodford
Casual Observer you are correct to challenge Keith on his constant bleating about intensification into barns .
They commonly need a plus $6 milk price to break even at farm level before any interest ,depreciation
These barns systems struggle to work in EU and the U.S.where " support payments " are used to top up milk prices received
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.