Tuesday, 26 July 2016 07:55

Bumbling prices need CPR shock

Written by 
Andrew Hoggard. Andrew Hoggard.

Feds dairy chairman Andrew Hoggard says the Global Dairy Trade (GDT) auction needs some CPR to shock it back into life.

"If you look more into the future, forward contracts were still pretty flat. Six months out it was still US$2200/t. We want to see prices get close to that US$3000/t mark so we can get things back to a nice level," he says.

"While everyone has brought their cost of production down, it is still very much hand to mouth at the moment."

He thinks many farmers are getting their costs down to the $3.50-$4/kgMS range.

"The challenge is if you've got $1/kgMS debt, then you are in a hard place," he says. "There are people with more than $1/kgMS debt so that makes the proposition for them extremely tough.

"It didn't fill me with confidence but it's not yet time to hit the gloom and doom panic button.

"It's bumbling along there and I think a lot of people would feel a lot more comfortable if we saw a couple of decent rises to give us more confidence, but at the moment it is not inspiring a great deal of confidence."

DCANZ information showed the North Island was down 5% and the South Island down 22% in June. But it is not an indication of a trend because of the small amount of production in that month anyway.

"Just a few people deciding winter milk wasn't worth it can alter that quite dramatically," he says.


More like this

Front up about the mistakes — Hoggard

As well as laying out its new strategy, Fonterra should make clearer how it got into this trouble, says Federated Farmers national vice-president and dairy farmer Andrew Hoggard.

What ethics?

Your old mate just about choked on his bone when he read a media release from the multinational, tax dodging, perennially anti farming organisation Greenpeace calling on Feds to stop “kicking farmers”.

Dairy prices fall

Dairy prices fell overnight in Global Dairy Trade (GDT) auction, reversing the lift in the previous event.

Gun register likely to misfire – Feds

Misgivings about the practicality and cost of a firearms register are likely to dominate feedback from rural people on the second round of proposed Arms Act amendments, says Federated Farmers.


» The RNG Weather Report

» Latest Print Issues Online

Milking It

Milk on tap

The days of cafes getting milk in plastic bottles may be numbered if two young Dunedin entrepreneurs have their way.

Behind the eight ball

Global animal health company DSM says it has a product that can help reduce emissions from cows by up to…

» Connect with Dairy News