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Home / The Country

Milk still flows, despite low prices

The Country
16 Nov, 2016 08:37 PM4 mins to read

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Dairy companies processed 20.9 billion litres of milk in 2015-16.

Dairy companies processed 20.9 billion litres of milk in 2015-16.

In a year which had the lowest milk prices in at least 20 seasons, milk production fell just 1.5per cent, according to statistics just released by DairyNZ and LIC.

Production for 2015-16 eased slightly despite 52 fewer herds and 20,522 fewer cows than in 2014-15.

In total, dairy companies processed 20.9 billion litres of milk containing 1.86 billion kilograms of milksolids (kg/MS) in 2015-16. This compares to 21.2 billion litres of milk (1.89 billion kg/MS) the previous season.

"The average produced per cow has gradually increased over the last 15 years and enables our industry to maintain high production year-on-year," DairyNZ senior economist Matthew Newman says.

"On average, each cow produced 373kg MS last season - very near the 2014-15 record of 377kg MS and still above the 2013-14 production of 371kg MS. On average last season, each cow produced 4185 litres of milk."

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LIC NZ markets general manager Malcolm Ellis says genetics and feeding these animals well ensures continual improvement in milking productivity of Kiwi cows.

Milk production in the South Island increased 2.0 per cent in 2015-16, with increases in both Marlborough-Canterbury (+2.5%) and Otago-Southland (+2.0%), while milk production in West Coast-Tasman eased (-0.8%).

"The South Island now produces 42.7 per cent of national milksolids production, compared with only 31.1 per cent a decade ago," says Matthew.

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North Island milk production declined 3.9 per cent in 2015-16, with all regions except Northland (which had no change) producing less milk.

Taranaki (-8.3%) and the Lower North Island (-5.4%) recorded the largest declines from 2014-15. Overall herd numbers fell for the first time since 2007-08, now totalling 11,918. North Island herd numbers declined 122 to 8696, while South Island herds increased 70 herds to 3222.

Ownership changes

Farm ownership structures are also changing, with 30.0 per cent of New Zealand dairy herds operating under a sharemilking agreement in 2015-16, compared with 32.4 per cent in 2014-15.

Within the sharemilker herds, variable order sharemilking herd numbers declined in 2015-16.

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Milk price rise 'sooner rather than later'

16 Nov 09:12 PM

In particular, 20-29 per cent sharemilkers decreased by 229 herds (-22%) to 821. Herd-owning sharemilkers (50:50) fell by 57 herds (-2%) to 2422.

Owner-operator herds increased 256 to 8315 herds in 2015-16, reflecting variable order sharemilkers moving to contract milking agreements.

"The number of cows milked in 2015-16 declined 0.4 per cent to just under 5 million, despite a very high number of culled cows during the last two seasons.

This reflects a high number of replacement heifers entering the milking herd in 2015-16, plus some carry over cows being culled. A further decline in the number of cows milked is expected this season," says Matthew.

Herd improvement

Changes in dairy breeds continue, with Holstein-Friesian/Jersey cross-breeds now comprising 47.2 per cent of cows compared to 45.6 per cent in 2014-15.

Holstein-friesians now make up 33.5 per cent of the national herd compared to 34.7 per cent in 2014-15, and Jerseys comprise 10.1 per cent compared to 10.4 per cent the previous season.

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A total 71.1 per cent of cows were mated by artificial insemination (AI) in 2015-16, down 102,467 (-3%) on the previous season.

In addition, the number of yearling heifers mated to AI declined 57,111 (-26%) to 163,864. This is the lowest number of heifers mated with AI since 2010-11.

Malcolm says this is a result of farmers being more cautious in the lower milk price environment.

"However, farmers understand the value of herd improvement and the expectation is for activity to rebound in line with the milk price."

The average six-week in-calf rate eased from 66.8 per cent in 2014-15 to 66.5 per cent in 2015-16. Over the past five seasons the national six-week in-calf rate has remained steady at around 67 per cent.

Herd testing undertaken was the lowest level on record at 61.4 per cent, down from 72.9 per cent in the previous season, as farmers reduced costs.

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"Early indications for the 2016-17 season are that herd testing is ahead of the previous season. A number of farmers who put herd testing on hold in 2015-16 are coming straight back to herd testing because they want the valuable information it provides."

- For a copy of the NZ Dairy Statistics 2015-16, visit dairynz.co.nz/dairystatistics

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