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TheDairySite Newsletter - 29 November 2013

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TheDairySite
Friday 29th November 2013.
Michael Priestley - Editor

Michael Priestley
Editor


Cost of Dairying Rises in New Zealand

Milk production costs across the key dairy regions have converged in recent years, making dairy farming more expensive in New Zealand than in Ireland.

Production costs have also risen in Australia, but as input volatility has gripped globally since 2007, most of the reasons for the southern hemisphere price rise go beyond the farmgate, say Rabobank agribusiness analysts.

This is according to this week’s Rabobank Agriculture in Focus report, which highlighted the importance of increasing efficiency as input costs rise and remain volatile.

Using farm data up until 2012, the study showed that, while farmgate production costs had fallen in the Netherlands, elsewhere, dairying inputs had trended higher.

In New Zealand, debt on owner operated holdings has more than doubled to almost NZ$20/kg milk solids, which analysts predicted will pressure farmers more as interest rates increase.

Debt was quantified as being 82 per cent higher per kg milk solids than a decade ago following a peak of 145 per cent in 2009.

Further to debt worries, updating infrastructure and de-intensifying farms will see Kiwi production fall while adding further costs as regulations demand sustainable farming and environmental compliance, the report predicted.

Rabobank analysts explained that the nutrient loss targets of the Horizons region cost NZ$3,000 per cow on some businesses and decreased production by over 20 per cent in extreme cases.

Moreover, lower yields will also stem from lower stocking densities and pasture management requirements, although nutrient limit setting will be at the discretion of regional councils, the report added.

Meanwhile, high labour and energy costs have plagued the Australian industry.

The report discussed urbanisation and a mining boom as factors for a lack of dairy workers, exacerbating already high labour costs.

This means a dairy worker’s hourly rate in Australia is 100 per cent higher than in California.

Rabobank findings also showed that, just like New Zealand, trying to farm sustainably is starting to cost the sector.

The 2012 carbon tax was partly responsible for steep power price increases, added to by investment into infrastructure. However, this could be abolished and efficient, low-carbon alternatives could reduce the energy issue further.

Looking forward, Rabobank analysts have predicted 2014 to favour US production and other similar ‘feed-lot’ farms following a relaxation across grain. Similarly, immigration laws could also assist US cost margins.

Therefore, southern hemisphere competitiveness could be reduced as it faces more stringent environmental controls and European farmers speculate on quotas lifting in 2015.


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This Week's Articles and Analysis

How Can Canadians Respond to Pain Challenges in Livestock?
A farm animal welfare and behaviour expert has said that animal welfare research, while important, can't be waited on for fear of risking the sector's reputation.

Getting A Grip of Lameness
It is important that farmers tackle lameness as it can strike down the most productive cows, warns the Dairy Calf and Heifer Association.

Get Ready For More Cost Effective Genomics
The technology to DNA top performers may not be cost effective currently, but keeping a little reminder of a breeding animal kept in an envelope may come in handy in the years to come, according to Lisa Guenther, writing for Genome Alberta.

Cutting Costs: Don't Do it If it Affects The Cows
Parts of the farm which have the largest economic impact on production can also sting you for milk, suggests a study of operating costs for Upper Midwest dairies.

Market Reports

UK Total Income from Farming 2012 - 2nd Estimate
Estimates of Farm Incomes in Wales, 2012-13
UK Milk Prices and Composition of Milk – October 2013
USDA GAIN: Indonesia Dairy and Products Annual 2013
USDA National Dairy Products Sales Report - 27 November 2013
USDA Agricultural Prices - 27 November 2013
USDA Cattle on Feed - 22 November 2013
USDA Cold Storage - 22 November 2013
USDA GAIN: Japan Dairy and Products Annual 2013

Global Dairy Industry News

   Philippines

Typhoon Livestock and Poultry Losses over P2.7 Million

   Global

US Yoghurt Maker to Buy British Milk
Global Risks and Costs of Foot and Mouth Disease Outbreaks
Kill or Save the Environment With Cattle
Holstein Bull Unrivalled for Milk Yield and Fat Combination
Treating Coccidiosis in Sub-Clinical Stages

   European Union

Protein to be Targetted at More Glanbia Products
European Commission Makes U-Turn over Agricultural Promotion
Commission Urged to Protect Consumers, Animals and Ban Food from Cloning
Commission Clears Acquisition of Life Technologies by Thermo Fisher
Schmallenberg From France and Belgium, Wind Study Shows
Auditors Find Criteria for EU Farm Aid Abused
Europeans Still Poorly Informed about Antibiotics
MEPs Approve Greener and Fairer Agricultural Policy
Copa-Cogeca Welcomes Commission Proposal to Reform Promotion Policy

   United States

Study Looks into Alfalfa in Drier State
Daily Dairy Trading: Prices Continue to Build, Wednesday
Animal Healthcare Products Continue Sales Recovery in 2012
Daily Dairy Trading: Increase Seen Across Several Spot and Futures Prices
Methane Figures Are 50 Per Cent Higher Than Thought
Saving on Feed and Labour: Still the Two Main Costs
Daily Dairy Trading: Cheddar Prices Over 10 Cents Apart
Latest USDA Monthly Livestock Data Deemed Mostly Neutral for Cattle and Hog Futures
Composting Cattle Cuts Costs
NFU Leads Launch of 'Year of Family Farming' Campaign
NFU Represented on USDA Advisory Committee
Daily Dairy Trading: Butter and Blocks Higher, Thursday

   Australia

Territory Government Announces Drought Support
Saputo Closer to Warrnambool Takeover
Queensland Drought Intensifies

   Russian Federation

Russian Dairies to Receive Facelift

   Spain

Course Offers Help on Milk Package

   New Zealand

Director Resigns at Fonterra
Global Industry Fences Half the World

   United Kingdom

Milk Rolls Out of Arla's Largest Fresh Milk Dairy
Grant to Assist in Brucellosis Detection and Vaccination
Six Meals Wasted a Week Per Household
New Studentships Use Science to Boost Industry Efficiency, Know-how

   Netherlands

A Lot to Gain in Dairy Feed Efficiency

   Canada

Canada, Quebec Governments Announce Six Million Dollar Investment

   Israel

FMD NEWS: FMD Outbreak in Israel

   Germany

Milk Crisis Still Hurting German Farms

Events/Promotions

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