Free workshops to bolster farmer financial skills
Free workshops are being offered around the country to help farmers take more ownership of their farm business finances.
Rabobank reports that the future global outlook is clearer and more hopeful than it has been for months.
By mid-year, it says there should be a palpable return to familiar consumer patterns.
"It won't be immediate, and it won't be without some bumps along the way, but on balance, it should be positive for dairy markets."
Rabobank is forecasting a 1.1% increase in milk production across the Big-7 dairy producing regions in 2021.
This is a decrease compared to the 1.6% YOY increase in 2020.
EU
Looking ahead to Q1 2021, we expect milk supply growth to come to a standstill.
January figures indicate lower year-on-year milk volumes in Germany, France, and the Netherlands (-1.4% YOY).
Based on preliminary February data, we also anticipate milk deliveries to decline in those countries.
Tepid milk supply growth is mainly the outcome of diminishing farm 'cash' margins caused by average to slightly below-average milk prices, high prices for feed concentrates, and the limited supply of (high quality) roughage.
EU-27 average farmgate milk prices remained almost unchanged from October to an estimated average of EUR 35.04/100kg in January.
Current dairy commodity prices indicate momentum for base milk prices will increase modestly during Q1 and Q2 2021.
Several large processors have already announced small improvements in milk prices for February and March.
US
Rabobank forecasts a slight slow-down in milk production growth in Q1, to 1.6% YOY, due to cooperatives re-implementing base programs as well as a prolonged cold snap in February, which could have come lingering animal health impacts.
Higher feed costs will pressure margins, with corn and soy prices remaining elevated at least until the new crop comes in September, but supplies will remain tight through Q4.
However, with risk management programs, government aid, and relatively high milk prices in most of 2020, producers are entering this year in a strong enough position to be able to withstand these pressures.
Markets will experience continued volatility, though nothing like what was experienced in 2020.
Australia
Australian milk production growth stalled somewhat in late 2020.
Production for the season to date (July 2020 to January 2021) is up 1% YOY.
However, production fell by -0.7% in Q4 2020 vs. the previous year. Growth in the quarter was confined to NSW and Tasmania.
In January 2021, output was quite strong, recording a 3.3% YOY gain against a low comparable.
Rabobank has lowered its milk production forecast for 2020/21 and expects output to be flat with the previous season at 8.7bn litres.
Rabobank's southern export-modelled milk price for 2020/21 has been revised up to AU$6.60/kgMS.
China
Milk prices in China extended the upward momentum into early February 2021, hitting a historical high of CNY 4.29/kg (US$ 0.66/kg), up 12% YOY.
Meanwhile, milk production also topped a six-year high in 2020, with indications that momentum continued into January 2021.
Increased concentration of milk supplies in the hands of a few large players and a consumer shift toward the white milk category in the post-Covid-19 recovery phase have supported the price and production ains.
Until recently, the Oceania WMP price was a 23% discount to the average domestic milk price, but that competitiveness has now collapsed after narrowing import parity to 4% following the March 2 GDT event.
Retail and food service sales recorded substantial year-on-year gains during the Chinese New Year in the absence of major lockdowns experienced in 2020.
NZ
Producer confidence is riding high with commodity prices leaping 24% so far in 2021.
Off the back of the magnitude of the price climbs, and in anticipation of dynamics in China supporting further upside to come.
Rabobank now forecasts a farmgate milk price of NZ$7.80/kgMS for the 2020/21 season.
Rabobank anticipates milk collections across the 2020/21 season will marginally lift by 1% for the full season.
The new season's milk production (beginning June 1, 2021) will see stronger milk volumes year on year to kick off the beginning months.
Export volumes through 1H 2021 are expected to be higher compared to the prior year, due to weak 2020 shipments combined with relentless Chinese demand over the opening months of the new year playing out.
Federated Farmers president Wayne Langford is claiming “some real success” on the 12 policy priorities it placed before the Coalition Government.
Federated Farmers is throwing its support behind the Fast-track Approvals Bill introduced by the Coalition Government to enable a fast-track decision-making process for infrastructure and development projects.
The latest report from ANZ isn’t good news for sheep farmers: lamb returns are forecast to remain low.
Divine table grapes that herald the start of a brand-new industry in Hawke’s Bay have been coming off vines in Maraekakaho.
In what appears to be a casualty of the downturn in the agricultural sector, a well-known machinery brand is now in the hands of liquidators and owing creditors $6.6 million.
One of New Zealand’s deepest breeder Jersey herds – known for its enduring connection through cattle with the UK’s longest reigning monarch, Queen Elizabeth II – will host its 75th anniversary celebration sale on-farm on April 22.