More rain last week in localized areas of the NI and some in the south, but the central South Island continues to be baked with temperatures in the 30’s.
Some rain relief is predicted for this week, but nobody is suggesting it will be a drought breaker, and many believe the dry could continue for at least another month.
Some farmers in South Canterbury are now on OAD, 16 hour milking, or drying off poorer producing cows, as they make the hard decisions in the face of feed shortages and low prices.
Annual milk production is behind in Southland after a slow spring and dry January, and many areas of the Waikato missed significant recent rains.
Dairy advisers suggest the break even cost for feeding supplements for production is 25c/kg dm and many are unable to purchase feed for this value, and will dry off some animals instead.
The weather is reflecting in milk flows, with Fonterra readjusting predicted volumes 3.3% downwards, after present collection levels are 6% lower than last year.
Some analysts predict this could have a positive effect on price, as the market digests the influence of lower production, and the next few auctions could show future direction.
And at last nights event the short supply, production estimates and a more attractive currency, have significantly boosted auction powder prices with WMP lifting 19.4% to US$2874, and SMP rose 6.7% to $2598.
AMF and Cheddar did however fall in price, but were compensated by lifts in butter and rennet casein, so overall a very positive result, but analysts still report plentiful global supplies and weak demand out of China.
Synlait, however has a much more pessimistic view of the arrival of an upturn, and predict WMP prices to reach only $2700/tonne by July, and subsequently cut their forecast to $4.40/kgms.
Fonterra is blaming an administrators error in the loss of it’s cheese contract with the US, and also removed significant volumes of product out of the global dairytrade auction, on the back of the lower production forecast.
The theme of feeding as much grass as possible into cows to lower the cost of milk production, is again being highlighted, this time by a NZ sharemilker, in an address to an Irish Dairy forum.
Environmental concerns continue to be a priority in the sector, with a big fine for a recidivist Taranaki farmer for an effluent spill into a stream, and farmers in Southland voice their nervousness about nutrient limit proposals that could make many farms uneconomic in their province.
The evaluation of last winter’s cow deaths in Southland stressed the importance of caution when transitioning cows off grass onto brassicas, and advisers comment these rules also apply with summer brassicas.
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