Falling cattle numbers attributed to dairy price slump

The number of dairy cattle in New Zealand has fallen for the first time in about a decade, according to the 2015 Agricultural Production Survey.

Statistics New Zealand says the number of dairy cattle fell to 6.5 million in 2015, which was the first decline after nine years of consecutive increases.

Sheep numbers have continued to decline and there is now just over six sheep for every New Zealander, down from 13 sheep per person 20 years ago.
The survey is based on responses from farmers and foresters for the 12 months ended June last year, and it shows the number of dairy cattle has fallen as dairy farmers have slaughtered cows because of the slump in dairy prices.

The national dairy herd hit a record high of 6.7 million in 2014.

The biggest fall in animal numbers is in the Waikato dairy heartland where there were 153,000 fewer dairy cattle than in 2014, while Taranaki dairy cattle numbers were down by 8 percent and in Canterbury it was 6 percent lower.

The survey also shows that sheep numbers fell by 2 percent to just over 29 million sheep.

The number of beef cattle was marginally lower at 3.5 million and deer numbers dropped 6 percent to 900,000.
Resource:http://www.radionz.co.nz/news/rural/303637/falling-cattle-numbers-attributed-to-dairy-price-slump

New Coles milk brand sparks derision from dairy farmers

Farmers have met a decision by Coles to create a milk brand that will deliver funding for the struggling industry with cynical laughter.

Coles will launch a new milk brand and divert 20¢ a litre from sales to an independent diary industry fund, which the retailer said would "provide direct support to farmers and invest in innovation to ensure the long-term future of the dairy sector".

It would also contribute $1 million to the fund.

The decision comes amid warnings dairy farmers will go out of business in the face of low global milk prices.

"It's important that we have a vibrant dairy farming sector, and we can only have that if we work together to ensure the long-term health of the industry," Coles managing director John Durkan said in a statement.

Farmers argue they have little respite from challenging global conditions in their home markets after Coles slashed the price of private-label milk to $1 a litre five years ago. Woolworths followed suit.

"It's incredibly ironic [the fund]," said Victorian dairy farmer Marian Macdonald.

"Now that Coles are killing the goose that laid the golden egg they're saying we'd better get some grain under their nose to keep the head up."
Coles milk profit rising

Coles is making more money from its private-label milk than when it struck a deal with the nation's biggest milk processor, Murray Goulburn, in 2013 because the prices it pays are pegged to the international price, which has dropped.

When global prices rise, Coles pays Murray Goulburn more for its milk. When it falls, it pays less. Coles pays a processing fee, regardless of the price for milk. The retail price has remained the same at $1 a litre.

Ms Macdonald said she didn't want to look a gift horse in the mouth and welcomed the prospect of funding for dairy farmers.

"We love that [Coles managing director] John Durkan has had an exorcism," Ms Macdonald said.

"Tell him we will forgive him for his past sins. We will even shout him a glass of milk, fresh from the cow."

When Murray Goulburn secured the Coles private-label contract, former managing director Gary Helou argued it could turn a profit from $1-a-litre milk, when other processors said they couldn't, because he would invest in new manufacturing plants that would lower production costs.
Shareholder backlash

Murray Goulburn is facing a shareholder class action and a probe by the Australian Competition and Consumer Commission after it shocked farmers and investors by slashing the price it would pay its farmers for milk.

It will struggle to meet half its net profit forecast outlined in the prospectus for its partial float on the Australian Securities Exchange less than a year ago, after management's expectations for Chinese demand for its milk powders failed to materialise. 

Coles says its private-label milk accounts for only 6 per cent of Murray Goulburn's production. The retailer, which has yet to set a price for the new brand, also says it will not make any profit from sales of the new label.

Its decision comes amid growing angst in the sector, with some farmers calling on Deputy Prime Minister Barnaby Joyce to intervene and establish an independent review of the industry.

Industry group Australian Dairy Farmers has argued a $1-a-litre milk price is unsustainable.

ADF president Simone Jollife and chief executive Ben Stapley have meeting with Coles and Woolworths executives this week.

Ms Jolliffe, a NSW dairy farmer, said many farmers were hurt because Murray Goulburn's decision to cut prices came so late in the season, well after budgets were set in place and costs incurred.

She said she wanted to understand the detail of Coles' new milk brand and how the fund would support farmers.

"We would welcome an opportunity to add value," Ms Jolliffe said.

Victorian dairy farmer Andrew Leahy said the world market was holding farmers to ransom and was thankful Coles was at least "trying to do something".

But he said it was still up to the consumer to choose what will probably be milk priced at a premium to Coles' private label.


Resource  :http://www.afr.com/business/retail/new-coles-milk-brand-sparks-derision-from-dairy-farmers-20160517-gox1sc