Middle East demand cushions global dairy price drop at latest GDT auction
The upheaval in the Middle East may have eased the fall in global dairy prices last week.
New Zealand's second biggest dairy cooperative Westland Milk Products has released a budget for the 2016-17 dairy season of $4.55 - $4.95/kgMS.
Payout for the current season will be in the range of $3.80 - $3.90/kgMS.
Westland will also start its payout advance payments for the 2016/17 season at $3.80/kgMS payable September 20, 2016.
Chairman Matt O'Regan says, "This will provide much needed cash as early in the season as possible. Advance rates are budgeted to be phased down then stepped up, an approach similar to previous seasons."
O'Regan says the 2016/17 forecast while predicted to end with a better result than the 2015/16 season, still leaves farmers with cash flows well below their cost of production. The board and management will be looking for every opportunity to get as much cash to farmers as possible.
Chief Executive Rod Quin says the key influencers on payout are international market prices, foreign exchange rates, the contribution of Westland's value-add strategy, milk flows and expenses.
"The contribution to payout of our strategic move into value-add products – infant nutrition, EasiYo, retail butter and UHT milk and cream – is worth noting," Quin says. "Collectively, their value over and above the earnings we can expect from skim milk powder is budgeted at 48c per kgMS."
Quin says while Westland's pay out prediction is more optimistic than the current season, the market still faces a number of challenges.
"Prices remain under pressure as European and US dairy stock piles are now a feature of the market. Early contracts in our sales book are in line with budgeted prices, but market volatility with price movements, both up and down that can be sudden, make forecasting difficult.
"Based on what we see in the market today, with a forward view of global stock levels, customer demand and milk flows, we anticipate some minor increases for whole milk powder. However, we do expect pressure on skim milk and butter prices."
DairyNZ says its plantain programme continues to deliver promising results, with new data confirming that modest levels of plantain in pastures reduce nitrogen leaching, offering farmers a practical, science-backed tool to meet environmental goals.
'Common sense' cuts to government red tape will make it easier for New Zealand to deliver safe food to more markets.
Balclutha farmer Renae Martin remembers the moment she fell in love with cows.
Academic freedom is a privilege and it's put at risk when people abuse it.
All eyes are on milk production in New Zealand and its impact on global dairy prices in the coming months.
Claims that some Southland farmers were invoiced up to $4000 for winter grazing compliance checks despite not breaching rules are being rejected by Environment Southland.
OPINION: The war of words between Southland farmers and Environment Southland over winter grazing inspections reflects a deep lack of trust…
OPINION: Milking It understands a formal disciplinary process is being conducted by Victoria University of Wellington on what one of…