Fonterra is losing farmers to its competitors, with the co-operative’s market share running at about 85 per cent last year, down from 96 per cent when it came into being back in 2001. Chairman John Wilson says there has been anecdotal evidence of loss of market share. Farmers considering leaving Fonterra lodged their “cease” notices in February, but the co-op will not know until July whether they have followed through. AgriHQ expects New Zealand’s total dairy production to be down by 2.5 per cent this season, which ends on May 31. Fonterra estimates its production will be down 4 per cent this season. AgriHQ dairy analyst Susan Kilsby says Mid Canterbury-based Synlait Milk has picked up 28 new Canterbury milk suppliers – bringing its total to 201 for 2016/17. Synlait says increased demand for nutritional products and increased production capacity has created an opportunity for more Canterbury dairy farmers to sign up. Open Country Dairy – the country’s second biggest dairy manufacturer – is also understood to have added new suppliers.
Prime Minister John Key has started his week-long visit to China, with one thing on his mind — trade.
New Zealand already has a free trade deal with the Asian nation, but that was signed eight years ago and Mr Key believes it needs to be altered. His aim will be to improve the deal in relation to dairy, and make changes that will see the agreement move into the internet age and ANZCO Chair Graeme Harrison says improved access is critical to maintaining the strength of Kiwi sales in China and that would be helped by the signing of the TPPA. Mr Harrison is in China with the Prime Minister and says value added products are the key but NZ is hampered by geographic isolation, a small domestic market, trade barriers and entrenchment in commodities. He says strong demand for NZ beef products in China and North American should continue to bring in high prices for cattle farmers in the new season. The market should remain vibrant due to the Australians being in herd re-building phase. Graeme Harrison says unlike beef the lamb market will continue to stagnate with low demand from Europe due the affect their sluggish economy has on the restaurant trade where the bulk of NZ Lamb is eaten.
New Zealand export log prices held steady this month as improved demand offset an increase in shipping costs. The average wharf gate price for New Zealand A-grade logs was unchanged at $119 a tonne in April, from March, according to AgriHQ’s monthly survey of exporters, forest owners and sawmillers. Demand picked up last month following a slowdown in activity during the Chinese New Year holiday. Log inventories on Chinese ports stood at between 3.6 million to 3.8 million cubic metres, 60,000 tonnes being dispatched from the Chinese ports each day a day. AgriHQ analysts Reece Brick and Shaye Lee say general demand out of China is relatively positive but there are still concerns about the stagnant Chinese economy. Shipping prices edged up this month due to increased oil prices and as fewer ships visited New Zealand due to a decline in the importation of products such as palm kernel and fertiliser
Federated Farmers is happy with Environment Minister Nick Smith’s proposed national pest control regulations under the Resource Management Act. The proposed RMA regulations are in response to the Parliamentary Commissioner for the Environment’s report recommending a more standard approach to pest control. Federated Farmers Pest Control spokesperson Chris Allen says the proposed regulations would make dealing with pests clearer and simpler, avoiding duplication and ensuring a streamlined national approach. Chris Allen says it would make better use of the levy farmers pay for pest control.
Peter Clark, is the new president of the Forest Owners Association replacing retiring president Paul Nicholls. FOA members own the majority of New Zealand’s plantation forests. PF Olsen CEO Peter Clark has 40 years’ experience in forest operations and consulting in New Zealand, Australia, Southeast Asia, China and the Pacific and says he’s keen to educate New Zealanders on the multiple economic and environmental benefits of forestry.
Dairy Connect, a service introduced by DairyNZ to link one farmer with another to share experiences and advice is proving popular. It’s been in operation for five years now and Dairy Connect is actively working with farmers in all dairying areas of New Zealand. There are also four regional Dairy Connect Co-ordinators, three in the North and one in the South who are on farms themselves and understand the farming issues in their areas very well.
Last week was yet another week without any serious rainfall to note throughout both Canterbury and Otago. While parts of Otago have received the odd shower, it’s only been enough to keep the grass ticking over slowly, rather than promote any serious growth. North Canterbury is back in a similar situation it was in prior to Christmas, with some beginning to make arrangements to drop stocking rates if the latest dry persists. A few frosts started appearing, though this is fairly normal for this time of the year. In the North Island there was a slight hint of frost in many areas this week. This was being welcomed by many regions as it will help wipe out facial eczema. Feed levels are bolting across the majority of the North Island, and the store markets for both lambs and cattle are a hive of activity. Facial eczema is a major concern to both the sheep and dairy industries. Farmers in both sectors will face significant financial losses now and again in the spring. The NZDollar /US Dollar continues to challenge exporters with its volatility. Last Wednesday it reached 0.693, before dropping back to its current rate of 0.688. While some economists are reporting that the dollar may remain high in the short term, most forecasts to the end of this year still project a downwards trend. The ANZ is forecasting the NZ Dollar /US Dollar to be under 0.60 by year end.
Good autumn growth continues to bring life to the store cattle market, and another big offering of store cattle was easily absorbed by an enthusiastic bench. A good line up of R3 steers lifted in price, with Exotic making $2.89-2.96/kg, while Angus & A/Here x made $2.86-$2.99/kg. R3 Ang & A/Here x heifers were hot property also, making $1060-$1315 at $2.74-$2.86/kg. R2 beef steer lines were around the $3/kg mark, and buyers did not bat an eyelid, with Traditional, 375-425kg, lifting to $3.24/kg, while Ang/Frx, 377-385kg, made $2.90-$2.92/kg. A big yarding of R2 Friesian bulls sold well with decent numbers hard to find. 394-458kg sold for $1210-$1395 at $2.99-$3.05/kg, while 468-526kg made $2.75-$2.85/kg, lifting the 450kg indicator price for bull to $2.93/kg. R2 heifers standouts were 33 Angus, 333-370kgs, at $2.88-$2.97/kg, and 335-367kg Here/Frx at $2.83-$2.86/kg. Lamb numbers continued to climb, and quality was very good overall. Demand was strong for male lambs, and steady for medium to good males, with the better types making $82-$95, while just a handful of lines sold under $72. The top end of the ewe lambs also sold on a steady to firm market at $78-$90, but those at 30kgs and under eased to $60-$76. Breeding ewe numbers were limited, with MA lines selling for $56-$75 and 3-4yr $99.