It takes a more optimistic view than New Zealand’s biggest company which collects 87% of the country’s milk.
Fonterra predicted dry weather would cut production for the 2014-15 year by 3.3% but AgriHQ put it at 0.6% growth, senior dairy analyst Susan Kilsby said.
The difference was more noticeable comparing the two predictions for January to May. Fonterra expected a drop of 13.3% on last season while AgriHQ put it at minus 6%.
Kilsby said the primary drivers of the AgriHQ Milk Production Predictor, which put the New Zealand collection for the year at 1835.93 million kilograms of milksolids, were the weather and the number of cows in milk.
“Dairy farmers in NZ are taking a cautious approach to the latter part of the dairy season.
“Many have opted to cull excess dairy stock earlier in the season than they have previously done rather than buy more supplementary feed.”
Kilsby said 37% more cows were culled up to the first week of January than would normally have been the case.
South Island farmers, in particular, had been more proactive in culling stock early.
“The elevated cow cull is a reflection of both the dry weather plaguing much of NZ, the low milk price and record high beef prices.
“The value of a cull cow has decreased as the number being killed has increased but remains about 20% higher than it was a year ago,” Kilsby said.
The NZX Dairy Pasture Growth Index (PGI) shows just how quickly conditions for pasture growth changed.
The PGI was ahead of the 10-year average in the early part of the season.
However, in December the index dropped to 10% below the norm then crashed to 74% below the norm in January.
And while the outlook for price this season remained low AgriHQ forecast $6.40/kg MS next season assuming whole milk powder prices would average US$3250/tonne across the season.
Dairy commodity prices were now improving with greater upside expected for whole milk powder than other dairy commodities for which values would be curbed by strong competition from northern hemisphere suppliers.
The NZX Dairy Derivatives market indicated whole milk powder should trade above US$3500/tonne by the beginning of the next season.
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