NEWS
MACHINERY
Trucking firms under scrutiny for animal welfare. PAGE 15
Side-by-side easy, safe and comfortable. PAGE 39
ANIMAL HEALTH NZ scientists make breakthrough on animal methane emissions.
RURALNEWS
PAGE 33
TO ALL FARMERS, FOR ALL FARMERS
MAY 5, 2015: ISSUE 583
www.ruralnews.co.nz
Bounce-back expected PAM TIPA pamelat@ruralnews.co.nz
DESPITE LAST week’s drop in this season’s expected milk payout by both Fonterra and Westland there are positive – albeit slow – signs about the future outlook for dairy prices. Rabobank dairy expert Hayley Moynihan says the recovery in global wholemilk powder prices may be 12 months away. The global market is rebalancing in response to lower prices but it’s slow. Analysis shows that imports decline when prices are above US$3800/t for whole milk powder. Buyers are turned off; it happened in 2007-08 and again 2013-14. Below that price import demand and trade grows. (This analysis excludes China which has so many variables it distorts the figures.) Combined with other factors including increased cost of production, Rabobank estimates a price point the market can handle is between US$3500/t and $4000/t. (The early April WMP price on Global Dairy Trade was US$2450/t.) Moynihan told the DairyNZ Farmers Forum in Kerikeri that Rabobank forecasts it will take until March or April next year to reach the bottom of that trading range ($3500/t). “So it’s a prolonged recovery but medium to long term it will average somewhere in the $3500 to $4000 range,” she said. Only unforeseen events such as Russian President Vladimir Putin deciding to take European product again or the situation changing in China, would quicken the recovery. “A greater number of variables are
affecting the global market milk price, virtually all of which are uncontrollable. We will see those prices move back up again; currently they are not sustainable for anybody, for any export producers around the world. But it will take some time to get there.” Moynihan said one major scenario will be significantly less imports into China in 2015 versus 2014.
“We expect to see exports down by about 50% versus last year. So people who are expecting a very sharp increase in pricing because China is going to come back into the market – we don’t think so.” China’s consumption will grow long term but it will not be the primary and almost sole driver of trade growth as seen in the last
four-five years. Growth will be broader based, in regions like South East Asia, North Africa and other African regions. On the supply side, Moynihan said the quotas coming off in Europe would see about 4 billion litres growth annually until 2020. Earlier modelling had put that growth at 10 billion litres, but growth had come earlier. Now milk prices are low, some countries have penalties on the last
12 months increased production and the spring flush hasn’t been good yet. Rabobank is picking volumes from Europe similar to last year. After difficulties from 2008-12, the American industry is hitting its straps with lower grain prices, more investment and a reorientation towards export markets. They are getting 2-3% increases in milk production. “The mega dairies in the US are our main source of competition. They are moving to the areas of the US which are less heavily regulated and getting efficiencies that way. They are more of a threat than the production coming out of Europe in a post quota environment.” – Forecasts drop - page 4
PLOUGHING ROYALTY Jim Brooker (83), of Darfield, was an interested spectator at this year’s NZ Ploughing Championship at Palmerston, east Otago, last month. Booker won the first NZ Ploughing Championship at Oamaru in 1956, aged only 23. His prize was a round-the-world air ticket, including flights to Hawaii and Vancouver, a train trip through the Rockies to Toronto, then a flight on to Shillingford near Oxford, UK to attend the World Ploughing contest. He finished 11th out of 25 ploughmen from 13 countries and was farewelled from New Zealand by then Prime Minister Sid Holland and his Minister of Agriculture Keith Holyoake. Brooker started ploughing after he left school at 15 and still retains a keen interest in the sport today, hence his attendance at this year’s event. More on Jim Brooker and the NZ Ploughing Championships pp 18-19
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