DAIRY
At last a forecast North Canterbury dry land farmers will be excited about, as heavy rain and mild conditions this week should start the grass recovery.
The rest of the region has recovered reasonably well, thanks to early tough decisions preserving pastures from being damaged by continual heavy grazing.
The rest of NZ has had average autumn growth rates, that will allow pastures to recover over the winter break, and ensure cows put condition back on before the new seasons calving.
More and more cows are being dried off, as managers make decisions based on body condition score and time to recover before next calving, but for farmers in the drought areas the amount and quality of winter feed available will be an important managerial influence.
Waikato farmers are reporting high cow empty rates as a result of the poor spring last year and the outlawing of inductions ensuring that mating bulls were removed earlier.
The short term analysis of the market looks grim, with little likelihood of any upside for this year, and a much more pessimistic view for the new season, as the upturn is predicted to arrive slower than earlier estimated.
And with Dairy Base revealing average farm operating expenses now sitting at $5.22/kg ms before interest payments, the enormity of the financial challenge is well illustrated.
Westland today downgraded its predicted 2014/15 payout to $4.90-$5.10 blaming global skim milk prices out of Europe at $US$2100-$2200/tonne, and the rising currency values, as the reasons for dragging the market down.
Other analysts have noted the costs of forex trading on the payout, predicted to inflate the present Fonterra payout ahead of the market, but costing Synlait plenty in their milk return downgrade.
Fonterra shares have recovered slightly to now sit at $5.43, as the company announces plans for two new driers at Studholme, and report that the $150million Edendale expansion is on track to process all increased milk from the oncoming season.
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