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September Dairy Farming New Zealand Update

Friday, 30 September 2016 at 11:47am

The last couple of months have seen a significant rise in Dairy prices in the Global Dairy Trade auctions. This is a great sign and an important boost for New Zealand dairy farmers.  According to the latest ANZ farming report, milk production out of New Zealand and Europe remains the key - “lower supplies will keep stimulating demand, although the big stockpile of SMP held through Europe’s intervention scheme continues to overhang the market.”

Some reports out of China suggest they have been suffering from hot dry weather, which may restrict their domestic milk production.  If this is true China may start increasing their imports of milk products, and if New Zealand can secure this export we could see current prices maintained.

In August Fonterra released their annual report, announcing a 65% increase in net profit after tax to $834m for the financial year.  They have increased their 2016/17 forecast Farm-gate Milk Price to $5.25 kg/MS.  The company also confirmed that they will be moving more milk into higher-returning consumer and food service products.

While July saw above average temperatures and plenty of moisture, August was dominated by snow and frosts.  For this reason we saw a drop off of grass growth rates in some areas.  September welcomed the new spring weather and we finally got significant rainfall in the Canterbury region, where aquifers have become severely depleted from low rainfall.  Obviously more rain will be needed in this region to get groundwater to a sustainable level.  A spring storm also passed through the country, but thankfully stock casualties were minimal.

Pasture growth rates are above average for most areas and if we continue seeing this weather pattern then it is looking very positive for the coming months. 

Calving season went well this year. Conditions were good for most areas and early sales indicate strong demand for decent quality bobby calves.