Fonterra lifts forecast milk price mid-point, advance rate
Fonterra has bumped up its forecast farmgate milk price for the season on the back of rising commodity prices and a strong balance sheet.
MILK FLOWS nationwide are mostly up on last year, but dairy industry managers are not forecasting a record season.
Craig McBeth, DairyNZ, says the regions’ milk flow increases are ranging from zero to 10% on last year. But forecast percentage increases are based on very small actual volume increases.
“By February your season-to-date figure becomes more enduring… [relative to] to a previous year’s production at the same of year. But so far such a small amount of production has been sent to the factory that any increase can show up as a high percentage increase.
“It’s not necessarily going to result in that good start carrying on for the rest of the season, so there is still a lot of uncertainty where it will end up.”
McBeth says Southland has been slow getting going, probably because of later calving there. “Some cows have come back lighter from grazing because winter crops [suffered because of the dry autumn].
“They also had a couple of snow events making it harder to get feed into the cows, so that’s probably impacting early season production. Northland on a daily basis is doing well but on a season-to-date basis is not as a strong as might have been expected.”
Fonterra says overall the milk flow is about 4% up for the month to date, but 1% up on the season to date.
Much depends on how calving has gone, McBeth says. “The good story is farmers have plenty of feed growing and there’s been a great bounce back. They are feeding home grown feed more than is usual for this time of the year… saving money by reducing the use of supplements. These can now be available for other times of the season when they’ll generate more response. Resulting savings can be used to repay short term debt incurred in the [summer] drought.”
McBeth says the mild winter has helped pasture covers to respond and cow condition to rebuild.
“A lot of cull cows ended up in the freezing works earlier than normal so when the grass started to grow there were fewer mouths to feed and that helped the recovery.”
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