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March Dairy Farming Update

Thursday, 31 March 2016 at 12:16pm

The Global Dairy Trade Auction saw a slight gain at the beginning of this month.  Wholemilk powder prices were up 5.5% to an average price of US$1974.  The overall Global Dairy Trade Index rose by 1.4% and achieved an average price of US$2253.  This was good news for farmers as it was the first dairy price rise this year.

Unfortunately the prices dipped again at the next auction.  There was a 2.9% drop for the Global Dairy Trade Index at the March 15th auction, this is the lowest point since August 2015.  Wholemilk powder price saw a small 0.8% dip to an average US$1971 per metric tonne.  This drop in price reflects the large volume of milk being produced around the world, especially in Europe, and the continued pressure this places on the market. There is still hope that China will purchase more wholemilk powder this year compared to the same time last year because of these lower prices.

This week Fonterra announced it would pay an interim dividend of 20 cents a share, and they are forecasting a full-year dividend of 40 cents.  This will be paid out earlier than usual to help farmers in what has been a difficult season.  This means farmers will get a total payout of $4.30 this year.

On the weather front, the beginning of March saw another week without rain and very warm conditions for most of the country. There was some relief in the middle of March with a few significant rainfalls to help revitalise winter feed crops. The top half of the North Island and the West Coast now have good soil moisture levels. Autumn dews also started arriving in the last week of March, with Southland seeing its first frost of the year. 

Farm managers will now focus on ensuring body condition scores are being maintained and that feed is accumulated for late autumn production. Cow numbers are being trimmed again as only the most productive cows are kept