The Weekly Dairy Report: Another lift at auction reveals bottom reached, but ANZ lowers forecast to $4.35

DAIRY

The drought woes worsen, with many days in the 30 degrees and only patches of drizzle to break the relentless heat, as the dry spell widens to all east coast areas from Gisborne south.
Some areas have now had rain, but much more will be needed to revitalise pastures as the heat and wind evaporate much of the moisture ahead of the plants.

Reports now suggest the Opuha Dam could run dry if next months poor rainfall predictions run true, and many foothills irrigation rivers are under restrictions.

Even those still fortunate to have water are reducing the area irrigated to ensure efficient use of this scarce resource, and some are destocking or culling heavily to cope with feed shortages.

Bankers have recognised the desperate plight of many and are urging prompt communication, as this double whammy of adverse weather and markets will cause severe financial pressure .

The latest milk auction produced more evidence the market has bottomed, as prices have started the long haul back to sustainable values, illustrated by the last three events that have risen by a cumulative increase of 7%.

However to achieve this, auction volumes have been been reduced significantly, although reports global supplies are also slowing will also give further support to price levels.

Banks have differing views on how the present price levels will affect the payout, with ASB holding steady at $4.70, while ANZ lowering their prediction to $4.35.

Concerns are also being expressed about winter feed supplies for cows as many forage crops have had poor strikes and are well behind production averages, so early communication with graziers will be essential from managers to ensure feed shortages are covered.

Lincoln University research shows dairy heifer replacements grazed on dual purpose cereal and brassica crops, had better growth rates and had lower nitrate excretion, than those grazed on conventional pasture.

Reports out of China reveal small dairy farmers are dumping their milk as demand cools, and dairy imports into that country are predicted to fall by 12% this year.