The Weekly Dairy Report: Oceania prices confirm market weakness shown at auction

More wild spring weather associated with the equinox has brought more rain to dry areas and wind and snow to many others.

Pasture growth rates are steady and paddocks are being shut for silage in areas from Waikato north, as second round rotations start and managers are focusing on utilizing growing pastures and maintaining quality without the use of supplements.

Advisers are emphasizing the importance of heat detection so early identification of non cycling cows is achieved and remedies put in place, as days in milk is a major influence on total production.

The ramifications of last weeks big fall in dairy commodity prices via the auction are starting to ram home with two banks realigning their forecasts down with the market, to $4.80-$4.85/kg ms.

The high volume of product and low number of bidders created the 7% drop and Westland Milk Products suppliers were doubly disappointed on hearing their $7.27 payout for the 2013/14 year was well behind Fonterra’s.

This has created some nervousness within the sector especially as more talk of a slower recovery amid big global supplies has caused analysts to predict a delayed upturn well into next year.

Oceania prices confirmed the market dip shown by the auction prices as even the falling currency failed to fully buffer the dairy decline with new yearly lows  reached for both butter and whole milk powder.

Positives are being seen with the currency easing buffering some of this decline but whole milk powder prices needs to lift by a $1000 a tonne to maintain a forecast in the $5 region but world milk consumption is still predicted to steadily rise to adsorb increased milk flows.

The theileria disease cases continue to increase mostly in dairy cows, but it’s economic impact is being negated by early detection by well prepared managers.