Farmgate prices rise as farmers rebuild confidence
Sheep and beef farmers are cautiously optimistic as farmgate prices continue to firm.
The GlobalDairyTrade price index lifted by 1.9% at the auction held overnight.
Whole milk powder was up 1.8% to an average price of US$2,304/MT and skim milk powder was up 0.2% to an average price of US$1,891/MT.
ASB's Nathan Penny says the lift was well below expectations of a 10% rise.
Although the bank is sticking to it $4.60/kgMS milk price forecast – Fonterra's current forecast - the downside risk to this has grown, he says.
Butter and anhydrous milk fat posted the largest gains of 9.0% and 6.1%, respectively. Meanwhile, butter milk powder and casein posted similar-sized falls.
"The modest rise comes despite Fonterra's lower auction volumes," Penny says. "Ahead of the auction, Fonterra lowered the amount of WMP offered by 5% from what it had signalled previously.
"Moreover, Fonterra also lowered the amount of WMP it plans to offer over the rest of the season by 9%.
"Our view remains that dairy prices will move higher over 2016. NZ production is falling hard (we estimate that production is down around 3% in the season to November compared to the same period last season) and a large hole is developing in global dairy exports, particularly for whole milk powder (WMP)."
New Zealand First leader and Foreign Minister Winston Peters is ratcheting up pressure on Fonterra farmers as they vote on divesting the co-operative’s consumer and related businesses.
Alliance Group's Pure South Handpicked 55 Day Aged Beef has been recognised on the world stage, securing top honours at the World Steak Challenge in the Netherlands.
Meat co-operative, Alliance has met with a group of farmer shareholders, who oppose the sale of a controlling stake in the co-op to Irish company Dawn Meats.
Rollovers of quad bikes or ATVs towing calf milk trailers have typically prompted a Safety Alert from Safer Farms, the industry-led organisation dedicated to fostering a safer farming culture across New Zealand.
The Government has announced it has invested $8 million in lower methane dairy genetics research.
A group of Kiwi farmers are urging Alliance farmer-shareholders to vote against a deal that would see the red meat co-operative sell approximately $270 million in shares to Ireland's Dawn Meats.
OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.
OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.