Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
This routine update will cause a drop of approximately $185 in BW across all cows, bulls, and herds but does not reflect any loss in genetic value or animal performance.
To assist with ranking within a population, it's helpful to have a benchmark. In animal evaluation, this reference point is called 'Base Cow'. A Base Cow change causes very minimal re-ranking among bulls, cows, herds, or breeds. It simply shifts animals up or down depending on the genetic base that is chosen. Base Cow creates the yard stick to measure how much genetic progress is being made with each passing generation.
"New Zealand's dairy herd continues to make meaningful genetic improvement. Each generation of heifers enters the herd with higher BW on average, than the previous generation, leading to higher protein, fat and greater efficiency. Updating the Base Cow ensures BW remains an important and accurate ranking tool, reflecting the performance of today's dairy animals," says Andrew Fear, NZAEL manager.
From 20 June, the BW of the average dairy animal will move from $241 to $56. This shift follows the introduction of an updated reference point, known as a Base Cow, which will now be based on 2015-born animals instead of the current 2005 cohort.
