The Weekly Dairy Report: Most start new season with sound feed and cow condition but are apprehensive about slow arrival of market upturn

While the rest of the country suffered from climate extremes last week, Canterbury missed the much needed rain, and moves closer to a spring with a severe sub soil moisture deficit.

Calving is now in full swing further north, but still at least two weeks away for most of NZ, and there is some apprehension about what the season will reveal both from a climate and financial perspective.

The new bobby calf rules are gazetted to start on August 1st, with the main requirements being animals must be a minimum of 4 days old and fit for transport if sold.

They are not allowed to be carted across Cook Strait and should be in a truck no more than 12 hours.

Loading and unloading facilities are needed for calves, shelter provided before and after transport, and blunt force killing is banned are other main rules that will be vigourously enforced.

Autumn born dairy beef calves have sold at record levels in saleyards as limited options have been created by some dairy support taken back home, and graziers needing to fill this space with animals of any sort.

Buying at the top comes with some risk as overseas markets are already showing signs of peaking, and with two years to finish, some purchases could end in poor returns.

The North Canterbury Hurunui Water project has reached another milestone with consents in place and the appeals process finalized, and now seeks investment for the construction stage.

This will be a huge relief for this drought prone region but how individual farmers will finance these costs after two years of losses is difficult to fathom.

Last week’s milk auction saw prices unchanged and reinforced that the tightening of global supply is the new influence in any upturn.

Dairy product sales now involve early production and at present the market is playing a wait and see game, but with storage schemes in Europe still filling, buyers are under no pressure to commit much forward.

There have been some indications that milk flows maybe slowing in Europe amid these poor prices, and Fonterra’s June production was back 10%.

Westland Milk Products appoints an interim CEO from the board, as it seeks a permanent appointment to take this company ahead into the future.

The OECD predicts that whole milk powder prices will only reach $3000/tonne again by 2018, which could mean farmers will have to wait until the next year before they will return to profit.

This delay in the upturn maybe too long for those with heavy debt, and financiers will be keeping a close eye on spring dairy real estate sales to ensure their investment does not come under pressure.

The biosecurity outbreak with velvet leaf in fodder beet could have long term implications and officials are now meeting with farmers to plan how they restrict it’s spread.

The MPI has also announced a “predator free by 2050 campaign” that has been laudably viewed, but some feel unrealistic on it’s goals.