Maxum & Industry News

2-Sep-2010

Dairy farmers cautiously optimistic about prices

Dairy farmers are being warned not to expect a big pay rise despite a surge in world prices.  
Prices increased almost 20 per cent at this week's global dairy auction, due to tight world supply and strong demand from China.  
The turnaround comes after four consecutive months of decline wiped about a quarter from the value of some dairy produce.  
Norman Repacholi, from Dairy Australia, says it's a surprisingly good result, but not enough to boost farmers' pay packets.  
"I don't think it's enough to jump up and down and celebrate that there's going to be a raft of new step-ups, but I certainly think that it will provide some confidence to the budgets that were set at the beginning of the year."  
 
ABC Rural News

1-Sep-2010

October launch for WMP futures contract

The much-awaited Global Whole Milk Powder (WMP) contract – the global dairy  
industry’s first derivative product for WMP - will be launched by the New Zealand Exchange (NZX) on October 8. The global  
WMP would enable manufacturers and dairy trading firms, to manage price volatility as they can lock in prices in the WMP  
market up to 18 months in advance. According to NZX derivatives manager Kathryn Jaggar, this contract would also help  
farmers by providing them a view of the future market sentiment. The NZX contract will be cash settled and will be traded on  
the NXZ electronic platform GlobalVision and centrally cleared through the new clearing house operated by NZ Clearing Ltd. A  
range of futures and options products could be added to the market  
through 2010 and 2011, including skimmed milk and anhydrous milk fat  
futures, as planned by NZX.  
 
Dairy Globe

25-Aug-2010

Dairy industry cheesed off by drop in demand

Dairy farmers are being warned not to expect further pay rises until global economic conditions improve.  
Bega Cheese chair Barry Irvin says rural communities are struggling to carry the full cost of falling global demand for Australian produce.  
He says there should have been a stimulus package for Australian agriculture.  
"The global financial crisis hit agriculture very, very hard," he says.  
"And when we hear about how Australia successful Australia has been in avoiding it, the mining industry that has not been affected, and we saw a stimulus package that helped the general economy, but we didn't see a stimulus package for agriculture.  
"And the full brunt of the global financial crisis, in terms of what the dairy market did, that is crash by half, has come to affect everybody."  
Bega Valley rural businesses are carrying increasingly larger debt loads from farmer creditors after a decade of drought on the NSW far south coast.  
Rural supplier Peter Abramowski says the farmers' hardship stresses the region's economy.  
"People are getting more indebted," he says.  
"Unfortunately, when farmers get stretched at the bank, the next people they turn to tends to be their rural reseller and other people around town.  
"People have been paying for hay and bought in feed for 10 or more years and there is a limit to how much they can do.  
"They have used up other assets and it is a bit sad to see that happen, to put it down the cow's throats and not being able to take advantage of it."  
 
ABC Online

24-Aug-2010

Queensland dairy weighs in on new government

ueensland dairy farmers, gathering on the Sunshine Coast this week at the annual QDO/DIAA industry conference, have called on any new Federal Government to “immediately begin to work with the dairy industry to refine and implement the recommendations of a recent Senate Inquiry into milk prices,” said the Queensland Farmers Federation today.  
The Queensland farming industry, particularly the dairy industry, is of great importance to independent MP Bob Katter - one of the three independent MPs likely to hold the deciding vote on who forms government. Katter, who holds the seat of Kennedy in north-west Queensland, told Kerry O’Brien on Monday’s 7:30 Report that they had “fought like tigers” to stave off dairy deregulation, and that the result of the move was that “Within two years of dairy deregulation, there was a farmer committing suicide every four days in Australia.”  
“Labor, the Coalition, and the Greens all spoke about food security during the election campaign and a number of Senators gave commitments to pursue the Senate Inquiry recommendations, including reviewing and amending the Trade Practices Act,” said Brian Tessmann, director of the Queensland Dairyfarmers Organisation.  
“The events of the weekend have been nothing short of extraordinary, but once either party gets down to the business of government, which at the moment looks like requiring an agreement with independent Members, it needs to make the recommendations of this Senate inquiry a top priority,” he said.  
“A government that is serious about a national food plan should be ensuring that farmers are receiving sustainable prices for their work, investment and risks taken,” said Tessman. “At the moment, many dairy farmers are doing the numbers on their costs and the prices they get for their milk – and we have a situation where some are questioning whether it’s worth slogging it out. Yet, at the same time, the Queensland population is continuing to grow rapidly and will need greater volumes of fresh milk into the future.”  
Only Labor announced a national food plan as part of its election campaign, with the Coalition promising to commit funds mostly to agricultural research.  
A recent Senate Inquiry into competition and pricing in the dairy industry made various recommendations that, if implemented, the QDO believes would help rebalance of market power and improve transparency and fairness in the way farmers receive prices for their milk.  
“Working with dairy industry to refine and implement the recommendations from the Senate Inquiry would go a long way to helping to rebalance market power and ensuring that farmers are around in the future to supply that milk we all need,” said Tessman.  
 
Australian Food News

17-Aug-2010

2009/10 production was down 3.9%

official full-year  
milk production numbers were released by Dairy Australia  
showing total output for the year was 9.023 bn litres, down  
3.9% on the previous year. The result was a partial  
turnaround from the result 7 months into the year when  
volumes trailed 2008/09 by 6.5%, but the better season,  
lower supplementary feed costs and increased optimism about  
2010/11 prices lifted output – the last quarter has been 4%  
higher than in 2009. June output was up 4.6% - in southern  
regions up 5.2%.  
Western Victoria was the largest production region in  
2009/10, with 2.07bn litres or 23% of the total. Northern  
Victoria finally finished 12% lower at 1.67bn and now speaks  
for 18.6% of the total. 5 years ago, the north posted 25.3%  
of the national total with 2.57bn litres.  
 
Dairy Globe

17-Aug-2010

Grain price rise hits stock feed

Livestock farmers are feeling the effects of higher grain prices and are looking for cheaper alternatives.  
Prices have soared over the past few weeks, after Russia announced it would have to withhold exports because of crop failures.  
Europe and Canada have also downgraded their crop forecasts.  
Melbourne grain marketer Bill Baxter says the rise of about $65 a tonne is significant.  
"Many of the dairy farmers who grain feed have been using barley, because barley has been trading at a $40 margin below wheat," he says.  
"That difference has now shrunk to about $25, reflecting, I guess, the demand for a cheaper grain being barley over wheat."  
 
ABC National Rural News

11-Aug-2010

Grain prices surging

The surge in global wheat markets is remarkable. Fuelled by fear of crop shortages in the Black Sea area, the Chicago futures markets for wheat have risen 10 per cent in each of the past 2 weeks, adding up to a 66% increase from the low in the first week of June. Analysts have predicted exports of Russian wheat could fall from 22 million tonnes in 2009-10 to just 12 million tonnes in 2010-11. This year, world wheat buyers have tended to feel comfortable buying only as required. Trouble in the Ukraine and Russia, combined with investors who were short, continue to push wheat prices higher. Domestic prices for general-purpose wheat for the stockfeed markets are also up $15 a tonne to $245 a tonne.  
 
Dairy Globe

11-Aug-2010

Fonterra closes with a lift

Fonterra suppliers in Victoria and Tasmania will receive a final step-up of 4c/kg fat and 10c/kg protein for milk supplied in 2009-10. The company said it would be distributing $8 million to its farmer suppliers in Victoria and Tasmania as a result of the price increase. The company said the latest increase brought Fonterra’s average milk price for the 2009-10 season to $4.50 per kilogram of milk solids (inclusive of incentives, net of volume charge).  
 
Dairy Globe

9-Aug-2010

Boost for Victorian Dairy industry

A $40 million Victorian Government investment has the potential to deliver a $320 million benefit to Victoria’s dairy industry, Agriculture Minister Joe Helper said today.  
Launching the Dairy Futures Cooperative Research Centre (CRC) at Bundoora today, Mr Helper said the largest single investment in innovation in the Australian dairy industry will give our dairy farmers the knowledge and tools to become even more productive and efficient.  
“The Government is taking action to ensure Victorian farmers are productive, sustainable and competitive,” Mr Helper said.  
“The Dairy Futures CRC has firmly positioned Victoria at the forefront of global dairy research.  
“For the first time, dairy research across Australia will be brought together under one umbrella, enhancing collaboration between organisations and maximising returns on investment.  
“It will drive innovation in the dairy industry through three programs focusing on improving pasture productivity, driving animal improvement through genomic technology and ensuring industry directly benefits from the new technology.”  
Mr Helper said the Victorian Government contributed $40 million towards the $128 million research centre with further funding coming from the Federal Government and industry partners.  
“The Dairy CRC will train 30 new scientists with Masters and PhD degrees so not only is it investing in dairy research it is also investing in the next generation of Victoria’s agricultural leaders,” he said.  
 
Australian Food News  
The CRC is currently headquartered at the Victorian AgriBiosciences Centre in Bundoora and will move, in 2012, to the $230 million Centre for AgriBioscience, a joint initiative of the Brumby Government and La Trobe University.  
The AgriBio Centre is generating 390 jobs during construction and will inject around $620 million into the Victorian economy when complete.  
Dairy Futures CRC Chairman Mike Ginnivan said the centre’s research would provide significant benefits for the Australian dairy industry.  
“The Dairy Futures CRC is the largest innovation activity for the dairy industry and we are on-track to deliver benefits worth $320 million to Australian dairy farmers,” Mr Ginnivan said.  
“At this opening event, early research achievements into designer forage and animal improvement programs will be announced and profiled.  
“The industry is eagerly awaiting these new research outcomes, which will directly benefit farmers and their businesses.”  
 

5-Aug-2010

Fonterra to review payout forecast

Fonterra has said that it will be reviewing its current 2010/11 payout forecast for milk due to a further drop in international dairy prices and a strong New Zealand dollar.The firm said today (4 August) that following its latest global dairy auction, the gDT-TWI index was down 8.3%. This followed a 13.7% decline at the July event.  
“Encouragingly, whole milk powder had strengthened slightly for the February to April period,” said CEO Andrew Ferrier. “But the New Zealand dollar was at very high levels.”  
Ferrier said that as part of its normal planning process Fonterra is reviewing the current forecast in light of these developments.  
“We always said there would be a lot of volatility in the market and we are seeing it. It’s important in this environment to let our farmer-shareholders know as soon as possible if we think there could be any impact on payout,” he said.  
 
Australian Food News