Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
Northland and some upper regions of Waikato are highest on the radar for concern about summer dry, says Andrew Reid, DairyNZ’s general manager, extension.
Lack of moisture but also the unrelenting wind are drying the pastures so farmers in those regions are very conscious of what the rest of the season will hold for them, Reid says.
“That doesn’t seem to be so much the case for the rest of the country though,” Reid told Dairy News. “Temperatures slightly back from where we would normally find them and good rainfall over spring means the lack of rain over the last month has had less impact than we would have expected.
“Certainly Northland is the area of greatest concern for us.
“For those farmers who are concerned about what to do, we have local consulting officers they can refer to, or our website where we have fact sheets to help inform farmers what their options are.”
Taranaki seems to be faring well and so does most of the South Island, Reid says.
“It is particularly the Northland region that seems to be getting hammered by the lack of rain over the last month or so.”
This is typical of the middle of summer and most farmers would have planned for this dry period. The areas prone to dry are Northland, Hawkes Bay, Wairarapa and some parts of Canterbury.
From most reports from around the country they would define the season as “pretty typical” so far.
He expects pasture growth to be down on normal for this time of year due to lower soil temperatures, coupled with lack of moisture.
He says one of DairyNZ’s regional team pointed out that due to the wet spring less supplement was harvested. That means there is less of a buffer for farmers to feed out to stock if they get short of feed later in the season.
Fortunately there is a lot of kikuyu in Northland and it thrives in the dry weather so that will be helping farmers in those regions.
Production will definitely be down this year due to the destocking last year and also less feed going into the cows.
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