Another mild week for the country with most areas getting enough rain except North Canterbury and eastern areas of the lower North Island.
Winter dairy cow grazing rates in the Canterbury area are being quoted at 30c/kg dm, which is higher than last year and an added burden for financially strapped farmers, but reflective of the supply of volumes of feed in the region.
More fodder beet has been grown, and it’s heavier yield and quality even during a drought year, has helped cushion the expected shortfalls.
The mild weather conditions nationally has delayed the dry off and produced more milk than was expected, but this extra production has been a negative for price lifts, in a global market awash with milk.
Cull cows are dominating the cattle kill as dairy farmers cull heavily at dry off to minimise their winter feed costs, and reduce their stocking rates to levels sustained by growing pasture on farm.
Most cull in calf and dry dairy heifers are being sent to the works as traders disappear from the market, and change to traditional beef animals for a less risky future.
Another falling global dairy auction has further shaken farmer confidence, and analysts are now suggesting the financial upturn may take until 2017, with the ANZ now quoting a $5-$5.25/kgms payout for next year.
In it's financial stability report the Reserve Bank expressed it's concern of the financial stress of the dairy sector if prices remain low for next year.
This year it is predicted 25% of the dairy farmers will have a negative cash flow, and if the 2015/16 season goes as predicted, land values could fall and those farmers heavy in debt could fail to get credit.
This downturn has seen a severe analysis of cost structures on farm, and DairyNZ is reporting purchased feed is only economic if it can be costed for 3.5% of the milk price and below, which on the present $4.50 payout equates to 15.75c/kg dm.
They state rising feed costs are eroding NZ’s advantage globally, and encourage all managers to increase grazing utilization of existing pastures to remain competitive.
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