Misguided campaign
OPINION: Last week, Greenpeace lit up Fonterra's Auckland headquarters with 'messages from the common people' - that the sector is polluting the environment.
Most of the major banks are predicting a drop between 4% and 8% – much higher than Fonterra's current forecast of a 2-3% fall.
Rabobank is picking a fall of 8%, ASB forecasts 5% and BNZ picks 4%.
ASB rural economist Nathan Penny says the market has been focused on Fonterra's reduction in volumes on the GDT but will soon turn its focus on production and this is looking particularly weak.
"We've now factored in a 5% fall in production. Historically, that [would be] the largest fall since 1999... On that basis we would expect prices to continue to rise," Penny says.
Aggressive cow culling by farmers is evidence "both in numbers and what we are hearing around the traps".
"If you look at cow slaughter, the data is running well ahead of last year. With US beef exports we are going to breach the quota for the first time since 2004, I believe, and that is largely down to the dairy cow cull.
"Farmers are likely to cull more once they get through calving and peak milk production so they are continuing to think along the lines of reducing their herd size."
And spring has been poor, particularly down south, he says.
"In Southland they are struggling with temperatures and grass growth. The other factor is farmers using supplementary feed sparingly. So adding those things up, they are all effectively bowing to production being pretty weak. El Nino is another risk that hasn't been factored in."
Rabobank's Emma Higgins says supply could fall more – maybe up to 8% - as farmers cull, cut back the use of supplementary feed and take other measures to reduce costs.
Brendan Attrill of Caiseal Trust in Taranaki has been announced as the 2025 National Ambassador for Sustainable Farming and Growing and recipient of the Gordon Stephenson Trophy at the National Sustainability Showcase at in Wellington this evening.
The next phase of the Taste Pure Nature campaign has been launched in Shanghai, China.
Alliance Group and Grand Farm have signed a strategic co-operation agreement with a focus on delivering more premium New Zealand grass-fed beef to Chinese consumers.
OPINION: Two reports out last week confirm that the worst may be over for pastoral farmers.
Reuters reports that giant food company Wilmar Group has announced it had handed over 11.8 trillion rupiah (US$725 million) to Indonesia's Attorney General's Office as a "security deposit" in relation to a case in court about alleged misconduct in obtaining palm oil export permits.
DairyNZ is celebrating 60 years of the Economic Survey, reflecting on the evolution of New Zealand's dairy sector over time.
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