Inside: Milk & Food
New Zealand says no to more cows
A revival in milk production. Just before slowly starting to dry off the cows, the growing weather results in more milk. Higher prices on the Global Dairy Trade (GDT) also indicate a good start to the new season. Keep more cows? Rather not say the government and the dairy sector.
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Dairy farmers in New Zealand managed to produce more than 9 percent more milk in March compared to one year earlier. This yields a volume of 1,89 million tons of milk. The interim level for 2017 therefore amounts to 6,22 million tons of milk. That is a lead of 1,42 percent on the year before.
1,42
percent
Lower prices
The fact that extra liters of milk are being produced in New Zealand has already become apparent through the increased supply at the GDT. This resulted in lower prices. It was only at the beginning of May that the tide turned and the auction got wind in its sails. Whole milk powder increased to $3.233 per tonne. For New Zealand, 3.000 dollars serves as a kind of psychological limit, comparable to 30 euros in the Dutch milk price.
This means good news for dairy farmers in the 2017/2018 season. It gives the prospect of a higher opening price. After a few years of losses, livestock farmers are given the opportunity to fill the gaps in the balance sheet. The question then quickly becomes whether dairy farmers will again expand the herd. However, the answer does not come from the livestock farmers.
Expanding the herd
It appears that there is also a lot of discussion between politicians and the dairy industry in New Zealand. The topic of discussion is the size of the national livestock herd. A further expansion is described as 'not smart'. To offer the sector a good future, more opportunities are seen in the pursuit of a higher margin and reduction of the negative impact on the environment.
New Zealand is also close to the maximum size of its dairy herd. Not a bad development from a risk point of view, because the capriciousness with which China orders milk powder has already challenged the world market several times. New Zealand is the main provider of this. Restraint in the growth of supply can only work to the advantage of pricing and, in the long run, will be positive for the European dairy farmer.
