Trim milk season not a disaster

Last updated 05:00 20/08/2014

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Do you know that in the first half of 2014, the amount of global tradeable milk grew by an amazing seven billion litres.

OPINION: Enough milk to fill 2800 extra Olympic-sized swimming pools all became available for export.

It goes to explain why Fonterra cut this season's forecast payout by a $1 per kilogram of milksolids.

It would be nice if our politicians realised that farmers have good and bad seasons. They don't. All the spending promises seem to assume we're constantly swimming in greenbacks. We aren't.

It is also why anyone, whether a Kiwi or a foreigner, who looks at a farm like a get rich quick property scheme will likely end up being burnt.

A farm is your business and your home. This is why farmers are passionate about what we do and that makes us go the extra mile. I also take exception to the line "milk and disaster" being applied to dairy.

It is super trim season yes, but milk and disaster, no.

While not a vintage time for dairy, it is a season for our sheep and beef guys to shine. While sheep numbers have fallen below the 30 million mark, it has caused only a slight 1.4 per cent drop in the number of breeding ewes.

With Europe and Britain in recovery it augers well. Sheep go to highlight why our farmers are so good because the average ewe lambing percentage has been growing for years. Beef+Lamb NZ predict it will be up 1.5 percentage points on 2013 and a percentage point equals 200,000 lambs.

You may say farmers are defying gravity by boosting output from fewer animals. In the case of dairy, we're doing huge volumes from a modest increase in the national herd. All of this is great for emissions as much as is for our bottom line and the dollars, we farmers bring into the country.

It's a shame some politicians don't get what the word "productivity" means. Meanwhile, for the first time in seven seasons, beef cattle numbers have started growing. Our sheep and beef guys have a deserved spring in their step and the Beef + Lamb NZ Sheep Industry Awards show this.

Held in the North Island for the first time, those who attended raved about how positive it was. NZ Farmer rightly saying it recognises the "rockstars" of our great Kiwi sheep industry.

Back on dairy farms and with Rabobank warning farmers to prepare for "the possibility" of a $5 kg/MS payout, some may think "milk and disaster" is right.

If that were true then "milk and disaster" was 2012-2013, 2008-2009, 2005-2006 and 2002-2003, the surrounding seasons being not too shabby at all.

Rabobank, when looking past this season, sees strong demand and wholemilk powder in the high $3000 or low $4000 per metric ton range.

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Given this season is chock full of bad international news, I shake my head and politicians promising big like they're drunken sailors. That's not their money, it's yours.

With the outlook for meat and fibre looking good, I expect the next GlobalDairyTrade may be down again. It will be erratic until October but that last quarter could see stabilisation. Experts from Rabobank and Westpac expect price recovery in 2015 but it won't be flash or make up for the first half of this season. While farmers like me may no longer be able to burn the chequebook, some of our guys may be deleting their online banking apps. For a number, it means being extra nice to their bank manager.

This is not milk and disaster. This is the reality of being an exporter.

* Chris Lewis is Federated Farmers Waikato provincial president.

- Waikato Times


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