Fonterra has raised its forecast payout to dairy farmers.   It’s gone up by 50 cents per kilogram of milks solids, taking the price to $4.75 for the current season.   When combined with the forecast dividend of between 50 to 60 cents a share, the total payout to Fonterra’s approximately 10,500 farmers is estimated at $5.25 to $5.35 per kilo.    While it’s still early in the season, if that price holds farmers will be on the cusp of breaking-even after two seasons of low prices.   However,  Economists are urging caution for now.   The forecast increase follows a sharp improvement in dairy prices, which have risen by more than 20 percent in the last two GlobalDairyTrade auctions.  Fonterra chair John Wilson says while global milk prices remain at unrealistically low levels, global milk production has declined.    He says milk production in the EU is now in decline and Fonterra’s New Zealand milk collection at this early stage is around four per cent lower for the year to date.   But Mr Wilson warns  while prices have risen sharply, the high New Zealand dollar has offset some of those gains.

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New Zealand has posted its first monthly trade deficit of 2016, with a fall in meat and dairy exports putting a dent in earnings.    Official figures show a deficit of $433 million in July, compared with a surplus of $110m the month before.      Exports are down about 5 percent on a year ago, reflecting weaker agricultural export prices.    But import costs are down 10 percent, under the influence of cheaper oil, helping to shrink the annual deficit to $3 billion.

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Farming remains statistically New Zealand’s most dangerous industry sector, with indications the death toll this year could still be higher than in recent years.    Figures show more than 20 people killed in farming in 2014, and 19 in 2015, but there had been 13 already this year up to the end of last week.   Dairy, sheep and beef farming  and services to agriculture are the most dangerous parts of the industry,  and according to WorkSafe  poor information, low awareness of the issues, lack of understanding  of good health and safety systems, fragmented leadership in the rural sector and inconsistent messaging are some of the barriers to reducing accidents on farms.    A new wave of steps to improve safety on the farm called Safer Farms, has been developed after a review of issues and ACC data, and  is now working with farmers to identify risks on their properties and can be done to alleviate the dangers, not only to themselves but also others who come on to their properties, from contractors to recreational users.

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A trial to see whether rural people with chest pain can be better assessed by their local GP, instead of automatically being rushed to hospital, will start in November.   The 18-month trial will be carried out in rural Waikato and, if successful, it could be rolled out nationwide.   Patients with chest pains are in the top three events at emergency departments in Waikato.   Pinnacle Midland Health’s Network Research leader Tim Norman says they are hoping to find a better way of treating patients at their own GP clinic and not contributing to overcrowding emergency departments unnecessarily.   The trial involves taking a fast-track cardiac diagnostic tool used in emergency departments and adapting it for primary care.   Pinnacle Midland Health says about eight rural GP practices in Waikato have signed up for the 18-month trial.  Funding for the trial came from the Heart Foundation, the Waikato Medical Research Trust and Pinnacle Midland Health Network.

In this Market Insight we look at Australian beef slaughter rates  which have dropped so dramatically  through August, that several large processors have moved to  align killing capacity with supply. One of the country’s largest processors has opted to close their plant for 7 days, and others have dropped shifts to reduce killing tallies.  This month was always picked to be short supplied, as only limited numbers of winter-finished cattle were available to come forward.   Beef export volumes for July hit their lowest point since the 1970’s; with trade back 40,000 tonnes when compared with July last year. August export volumes are expected to be similarly impacted. Reports do suggest that Australian beef supply will pick up through September and October. Ironically, beef producers are crying out for dry, warm weather to boost pasture and animal growth rates.

There were nearly more people in attendance at Stortford  than cattle to sell with almost half the yarding coming into the rostrum at one time.   A line of 36 specially advertised Ang & A/Hx R1 steers were well contested and sold for $870 at $4.07/kg, while 5 Charolais of similar weight made $830 at $3.90/kg.   Ang & Ang /Hx R2 steers also sold very well, with 490kg making $1420 at $2.90/kg, while Limosin heifers, 321kg, sold for $930 at $2.90/kg.   A bigger yarding of cattle is expected next week.   It looks as if we have seen the bulk of last season’s lambs to come through Stortford, with numbers continuing to fall this week.   Evidence that farmers are cleaning up the tail end was in the pens, with a sizeable buying bench competitive enough for prices to firm.   The main weight bands of 32-34kg and 35- 37kg were  up 8-16cpk, while male lambs, 32-34kg, gained 10cpk.   Heavy ewe lambs sold for $114-$123 at $2.68/kg, while the lighter lines were well over $3/kg, with 24-25kg at $3.32/kg and 26-27kg, $3.58/kg.     The ewes with lambs at foot  are providing  very good returns.   Good condition older ewes with single black face lambs made $83.50/kg, while multiples from the same camp were not far behind at $79. Lighter condition ewes with mainly single, younger lambs sold for $65-$70.