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The Weekly Dairy Report: Fonterra announce sharp downward adjustment to this years payout

Rural News
The Weekly Dairy Report: Fonterra announce sharp downward adjustment to this years payout

Nationally moisture levels are above the norm but even with temperatures lower in both islands, regions report good pasture covers going into calving.

Calving is in full flow in many northern farms and bobby calf numbers are increasing at the saleyards.

Managers are being reminded mastitis prevention procedures around calving is important to minimize problems during the rest of the year

Fonterra have announced a downward adjustment to the predicted payout for 2014 to $6/kg/ms down from a previously announced $7, and well back from last years figure. While this was well warned by analysts and bankers those farmers that have systems with high farm costs and debt will find this year difficult financially.

Advisors are suggesting budgets be pruned now, although commentators believe an upward adjustment in prices will start before the end of the year.

With the drop in prices, dairy farmer confidence has fallen as has volumes of farms for sale, but support continues for dairy’s future from MyFarm with a debt free farm listing for outside investment.

USDA analysts predict NZ’s production will increase, as will on farm investment but the messages of debt reduction are being heeded.

Positive news for the sector comes with less farmers being prosecuted for dairy effluent offences and LIC’s announcement that they have identified animals that have shortened gestation lengths that could increase milking by 10 days longer.

While Fonterra has been successful in getting a delay in the botulism case with Danone, they have been quick to reconfigure the workforce at a packaging plant in Hamilton with the possible loss of 100 jobs.

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