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Clover reduces producer price once again
Clover has announced a decrease in producer prices “by a further 30 cents per litre from 1 August 2015, in addition to the 30 cents per litre reduction announced in May this year. The effective reduction in the price offered to producers is therefore 60 cents per litre effective from 1 August 2015.” Clover ascribed the decrease to high supply volumes and low commodity prices, which have resulted in the stock piling of products with a longer shelf life. Clover expressed concern about high production volumes in June and July when shortages traditionally occur. Other causes for concern are milk buyers wanting to sell raw milk to the company and buyers not paying producers on time.
 
Local market
 
Current market situation
The current oversupply of milk is the result of higher production and increased imports. The total milk supply consisting of production less net exports increased by 182 million litres during the first five months of this year, compared to last year. Higher milk production contributed 117 million litres (65%) while higher imports and marginally lower exports contributed 65 million litres (35%). Imports are therefore one of the factor that have resulted in the current conditions. Positive demand growth in the year to the end of March 2015 at higher retail prices shows that the local market may be more resilient than expected. If demand continues to grow at current rates, it will contribute to a more balanced supply and demand situation in future. Production growth depends on climatic and economic factors. The announced decrease in producer prices and possible further increases in input prices will affect farmers’ future production decisions and may result in lower production.
 
 
Brucellosis in Karoo
News 24 reported today that a farmer outside Beaufort West in the Karoo had to cull over 100 goats after a reported case of brucellosis. The farmer’s wife became ill earlier this year after she was infected by a goat. Brucellosis is usually transmitted to humans when drinking unpasteurised milk. Western Cape MEC for Economic Opportunities and Agriculture Alan Winde said vets tested 935 animals on the farm after a routine inspection by state veterinarians pointed to a risk. Some of the samples tested positive for Brucella and as a result, 120 goats were slaughtered. The farm had been under quarantine since March and tests were conducted on neighbouring farms. Winde stated that the department is confident that the disease is contained. 
 
 
Overview of training offered by MPO’s IDT
Dr Jan du Preez of the MPO’s Institute of Dairy Technology (IDT) gave an overview of technical training recently offered by the IDT to dairy farm managers in an interview on RSG. To listen to the interview click HERE.
 
 
Absa Agri Trends published
Absa has recently published its latest Agri Trends, an overview of the local and international trends in various commodities. To download the report, click HERE.
 
 
International market
 
US exports cows and heifers to Russia
Despite the ban on most meat and dairy products from the US, the EU-28, Canada, Australia and Norway to 6 August 2016, Russia still imports cows and heifers from the USA. The US Department of Agriculture released trade figures indicating that Russia has imported 2 222 cows and heifers from the US in May 2015. Total US cow and heifer exports were 3 342 head in May, which is the highest monthly export total since August 2014.
 
 
Woes of Irish dairy farmers
Irish dairy farmers are currently concerned about the low producer price and superlevy fines. The producer price paid buyers paid to producers in May 2015 amounted to €0,28 (R3,89) to €0,30 (R4,16) per litre, down by €0,09 (R1,25) to €0,11 (R1,53) from mid-2014. The lower producer prices will have a significant effect on farm income for 2015, since farm production costs remain on the same level as in 2014. In addition to lower margins in 2015, Irish dairy farmers face a substantial superlevy bill accrued for the 2014/2015 milk quota year. Ireland exceeded the quota by 4,34%, taking butterfat content into account and will have to pay a superlevy fine of €68 million (R944 million). To read more, click HERE.
 
 
Lithuanian dairy farmers protest
Lithuanian milk producers protested against an unsustainably low producer price of €0,10 (R1,39) per litre by discarding 30 000 litres of milk on 1 July 2015. The Lithuanian dairy market is dominated by five major milk processors who purchase milk from local and foreign milk producers. Following the approval of a new law aimed at ensuring fair trade practices in the milk supply chain, processors offered to buy locally produced milk labelled as “surplus” at €0,10 per litre. Cooperative farmers in Lithuania are currently paid an average price of between €0,16 (R2,22) to €0,17 (R2,36) cents per litre. To read more, click HERE.
 

Institutional
 
Agri SA shares concerns with Eskom
Johan Pienaar, Agri SA executive gave feedback in an interview about a meeting the organisation had with Brian Molefe at Eskom to share the concerns of farmers about the negative effect of power interruptions and the increase in the cost of electricity. To listen to this interesting interview, click HERE.
 

ARC wants pregnant heifers and first-lactation cows
 The ARC Animal Production Institute is urgently seeking pregnant dairy heifers or pregnant first-lactation cows in good condition for stocking the new village dairy enterprises. These are components of the rural dairy value chain (DVC) system, a livelihood and economic transformation strategy within the National Comprehensive Rural Development Programme (CRDP). Sell us your pregnant heifers and contribute towards transformation in the dairy industry in South Africa. Small- to medium-sized breeds and dairy crosses are preferred. Please contact Dr Florence Nherera-Chokuda, DVC project leader, at 012 672 9335 or 078 745 5727, Claude Muya, DVC project manager at 012 672 9122 or 078 739 1495, or Sandra Erasmus, dairy herd manager at the ARC at 082 372 6055.
 

Technology transfer
 
Pasture inputs for optimal outputs
To achieve optimal outputs from a dairy, it is essential to have the best inputs. In a pasture-based operation, the major inputs are pasture availability and quality, balancing the total diet and managing these inputs. Although the dairy cow can efficiently convert poor-quality inputs (such as roughages) into milk, the quality of these inputs affects the quantity of milk produced as well as the type and cost of other supplements needed to achieve the desired output. Turn to page 70 of the July edition of The Dairy Mail for an interesting article in this regard by Rob Philips, sales manager at Meadow Feeds. To read the digital version of TDM, go to www.agriconnect.co.za
 
 
Links
Milk Producers’ Organisation
The Dairy Mail
 
Contact us
 
Dr Chris van Dijk
CEO: MPO
 
Barbara Bieldt
– Manager: Market protection and development
 
Dr Koos Coetzee – Economist
 
Philip Swart – MPO member services
 
 
Copyright © 2015 Agriconnect, All rights reserved.


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