The Weekly Dairy Report: Managers surprisingly upbeat amid tough global dairy market conditions as northern farms get ready for early calving

While the country has basked in record warm temperatures in the last 6 months most of the NZ ( with the exception of the east coast of both islands) is now experiencing wetter than normal soil conditions.

Care needs to be taken to avoid pugging pastures in the lead up to calving, as potential spring pasture growth and resultant milk production will be lost if this occurs significantly.

Farmers report ideal cow wintering conditions in the drier eastern areas with animals thriving over the winter period, although Southland again has had cow deaths from poor transition onto fodder beet.

Breakouts through the hotwires has been one of the main causes and farmers are being urged to be careful when feeding this super feed.

As the calving season approaches up north, the focus has turned to bobby calf management, with new regulations, and animal protest groups busy trying to discredit the sector on any misdemeanors.

Pessimism abounds in the dairy market, with some analysts believing NZ’s turnaround is strongly linked to the European milk flows, which at present show little signs of easing.

Volumes of product in storage in Europe is growing, with SMP volumes now half what they export and this will put a handbrake on pricing for a while into the future.

The Brexit result will do nothing to build confidence, has already had a negative impact on currency values, and all agricultural sectors will be looking for NZ trade negotiators to do their jobs well.

Australian analyst’s and Bega Cheese state that they believe there will be a delay in any milk upturn until at least 2017, when poor returns will finally lower milk flows and stimulate demand.

Agricultural debt has ballooned to $59 billion (of which dairy has in excess of $40 billion) and this sector is now carrying much more debt than any of our overseas competitors.

In such tough times this puts our industry at a significant disadvantage in trying to maintain our share of the export market.

The milk derivative markets have been active, especially in trades for whole milk powder, as some are looking for more certainty in a decidedly uncertain market.

Surprisingly the latest farm confidence survey has shown a big lift in optimism for the future (albiet from a very low base), as farmers readjust their management systems from one once driven by production, to systems now driven by profit.

The cow cull has wound down fast, and analysts forecast numbers will be below last year as managers have pruned from their herds the poor producers and only kept the very best replacement heifers.