World Watch

Making silage, spending money

New Zealand dairy producers are flat out making silage and baleage at present. A cool spring has meant the peak milk production time of late October was not very spectacular.

Producers received their first milk check for the season in early November, and

Better attitudes

New Zealand dairy producer confidence is continuing to improve, according the latest bi-monthly Rabobank/Nielsen Rural Confidence Survey. It shows the number of producers expecting rural economic conditions to worsen has almost halved.

Ben Russell, Rabobank's general manager of Rural New Zealand, says it's the fourth survey in a row to show overall improvement in producer sentiment, which is being led by confidence in the dairy sector. But he says there is also improved confidence in the sheep and beef sector.

More conversions to dairy

About 12,000 acres of land (nearly 20 square miles) is being converted to dairy in the Hawkes Bay region of the North Island in New Zealand, and will be ready for production next season. This area has traditionally been in sheep and beef, and recently wine production.

The 12 conversions are between 900 acres to 1,000 acres each. A further 12,000 acres are being looked at for conversions in following seasons.

Meanwhile, property values in Southland, the southernmost region of New Zealand, have risen 25% to 30% since the start of the year because of continued interest in dairy conversions. Land is selling for between $7,500/acre and $9,000/acre.

World dairy markets to soften

Fonterra, New Zealand's large dairy co-op, is predicting that global dairy prices could soften a bit over the next 12 months, but it expects demand to remain strong. Adding to the optimism is China, where Fonterra controls 43% of a venture with San Lu Group, the country's largest producer of milk powder.

Fonterra sees a huge demand for dairy products in China. San Lu and Fonterra set up a pilot farm, 85% owned by Fonterra, earlier this year with 3,000 imported cows. It is expected to start producing milk this month.

And in Europe

Blue tongue is creating problems in Europe, particularly in Holland. In September, death losses jumped 5% compared to figures from a year earlier, with producers and veterinarians blaming blue tongue. Dutch researchers now say that blue tongue can be spread through natural service in cattle (and sheep). The blue tongue virus is not present in semen, but it is in blood. And if there is any tearing of tissue during natural service, the virus can be transferred. The European Union has also now eased rules that allow vaccination for blue tongue. Dutch heifer exports are also down nearly 20% (9,000 head) due to blue tongue. Several countries have closed their borders to Dutch cattle because of this. Despite the blue tongue outbreak, the average Dutch Holstein cow is now producing 21,300 lb. of 4.4% fat and 3.5% protein milk. Average lifetime production of a Dutch Holstein is 65,000 lb. of milk, with the number of calvings averaging 3.5. The August milk price in Germany hit $23.50/cwt. This was a 30% jump over last year, and the highest milk price in Germany in 18 years. German retail butter prices have shot up 60% this year. Due to a shortage of milk, France has increased its dairy quota for all farms by 10%. Danish producers are asking for a 3% to 4% increase.