ANZ Warns of Milk Price Risks as New Dairy Season Begins
The new dairy season is kicking off with plenty of risks to the forecast farmgate price, both upside and downside, says ANZ agricultural economist Matt Dilly.
So says the Pasture Renewal Charitable Trust (PRCT), which last spring began campaigning to get farmers to get busy on pasture renewal.
"Pasture renewal offers a great return on investment at a time when pastoral farmers are under pressure," says PRCT project manager Tim Wood. "The weaker pay-out for dairy farmers this season has seen a refocus on the importance of pasture."
The message is getting through, Wood says, as evidenced by the 2014 Dairy NZ Economic Survey showing that dairy farmers spent on average only $17/ha on regrassing in 2004-05 – rising to $73/ha in 2013-14.
"Even taking inflation into account, this is more than a doubling of regrassing spending over eight years."
And the 2015 ANZ Business Barometer showed that 67% of red meat farmers spending money on their businesses are forking out on pasture renovation or forage crops.
ANZ quotes a recent red meat case study showing a 35% return from spending on fencing, water, fertiliser and pasture renovation. The top three choices were pasture, fencing and fertiliser. In the dairy sector 55% were planning to renovate pasture or plant more area in crop.
And pasture seed sales are up, says the New Zealand Plant Breeders Association: 2009-2014 pasture seed sales rose by 17%. "Although this has levelled off recently; it shows farmers are recognising the benefits of regrassing," Woods adds.
Wood says PRCT is asking farmers to do something about the difference in the pastures of their best-performing and lowest producing paddocks. This typically could be 100%.
Sales reps who regularly visit farmers are being prompted to ask how this difference can be addressed in a planned way, Woods says. "The 10% goal gives reps a lead in to conversations about pasture renewal and how it benefits farming."
PRCT will reprint a pasture condition score guide – folded to pocket size and waterproofed – for farmers to use in the paddock to assess pasture quality. The guide advises on preferred action and gives ten tips for pasture renewal success.
