Returns lift, costs down - DairyNZ
The outlook for dairy farmers this season has improved, especially when compared to forecasts only six months ago, according to DairyNZ.
Dairy prices ended their recent slide in last night’s GlobalDairyTrade auction, with the price index lifting 2.7%.
With the last four GTD auctions recording a drop in prices, last night’s positive results would be good news for farmers.
Prices rose for most products on offer, including a solid 3.6% increase in whole milk powder prices.
Westpac senior economist Anne Boniface notes this was the first lift in whole milk powder prices since March: there were smaller improvements in fats prices.
Boniface says global growth in milk supply is still expected to be relatively modest over the second half of this year.
“While much will depend on pasture conditions in New Zealand, it’s unlikely that last year’s exceptionally strong growth in milk production during spring will be repeated.
“And with the national herd likely to be static, or even contract a little, further growth in the national milk supply will hinge on incremental productivity improvements.”
One crucial development to keep an eye on is how Chinese demand evolves in the coming months.
Buying from the North Asian region (dominated by China) has been strong through the first half of the year. Most recently, the proportion of GlobalDairyTrade sales to the North Asian region has been notably higher than usual through June and July.
Boniface says this suggests that consumer demand for dairy products in China seems to be holding up well, despite growing headwinds for the Chinese economy and trade tensions.
“While last night’s GlobalDairyTrade auction was a little stronger than we had pencilled in, we remain comfortable with our $6.90 milk price forecast for the current season,’ she says.
Key results
AMF index up 1.7%, average price US$5,523/MT
Butter index up 1.7%, average price US$4,406/MT
BMP not offered
Ched index up 3.3%, average price US$3,869/MT
LAC index not available, average price not available
RenCas index down 3.4%, average price US$7,044/MT
SMP index up 3.8%, average price US$2,505/MT
SWP index not available, average price not available
WMP index up 3.6%, average price US$3,074/MT
Farmer-led charity, Meat the Need is calling for donations to enable it to supply more meals to families in need.
Weaker pricing and demand from China continue to impact New Zealand red meat export earnings.
Fonterra has cemented its position as the country’s number one cheesemaker by picking up nine NZ Champion of Cheese trophies this year.
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
Horticulture NZ chief executive Nadine Tunley will step down in August.
OPINION: Canterbury milk processor Synlait is showing no sign of bouncing back from its financial doldrums.
OPINION: It seems every bugger in this country can get an award these days.