By QUENTIN CLARKSON
Farmers can expect a continuing fall in milk prices, say two Hamilton dairy experts.
John Penno and Eric Kolver of the Dairying Research Corporation say the average inflation-adjusted milksolids payout has fallen 1.9 per cent a year for the past 25 years.
The decline is the result of a downward
trend in international commodities and lower milk prices because of increased production.
"This downward trend will continue," Mr Penno said.
The pattern would have been even more marked if the dairy industry had not rationalised milk processing and marketed more milk as consumer and ingredient products.
Mr Kolver said that rather than reach a constant milk price, future payouts would reflect the true value of milk received through the season.
However, as milk prices declined, cow quality would improve.
The breeding worth of livestock had increased in the past 12 months and would continue to increase over the next five years.
Tomorrow's high-breeding cows would weigh more and direct more energy towards making milk, and less to body fat.
But their eating and breeding habits would need to be watched closely.
The profitability of supplementary feeding would increase as high-breeding cows made better use of high-cost feeds, especially in late lactation.
