The cull cow kill was exceptionally high.
DairyNZ senior economist Matthew Newman said the national cull cow kill this year increased by 185,650 or 21% compared to last year. A total of just over 1 million cows were culled at works from June 1 2014 to May 31 2015. Most were dairy cows.
“There are three main reasons for the increase – lower milk prices, higher beef prices and early summer dry conditions,” Newman said.
Lee McDonald, the managing director of stock firm South Island Dairy Farmers, said the Canterbury drought was also a factor and he estimated cull rates of 15-17%, double what would normally occur.
In addition, many farmers were wintering part of their herds on their milking platform to reduce costs, resulting in an unexpected influx of surplus kale crops available for grazing.
“It is a year I thought there would be a struggle to find winter feed but, quite frankly, we have got a lot of these blocks.”
McDonald said next season’s production depended on the spring and the market for in-milk cows could be quite strong if there was abundant grass growth.
Rural Livestock Otago dairy agent Dick Sharpin said budget, carryover cows and heifers, which would normally have been sold, had been killed as farmers took advantage of the beef schedule.
The dry summer would largely have been responsible for the 2% drop in milk flows last season and a better growing year this season could see milk production grow.
Federated Farmers Dairy chairman Andrew Hoggard said he had already reduced his 560 cow herd by up to 20 and would decide in the coming days whether to reduce it further.
“We’ve certainly culled a bit more heavily this season and, given the payout prediction, might actually drop it down a little bit more.”
Equally, he was considering his policy of grazing heifers off-farm.
Hoggard said the implications were that milk flows this season could fall again but balancing that were the number of new dairy conversions that would start production.
“I don’t know where it will end up but my gut feeling is that it will not be a super-boom year in terms of production.”
PGG Wrightson North Island dairy livestock manager Jon Lee said farmers were planning to milk fewer cows.
“Any passengers that aren’t cutting the mustard, either production or animal health-wise, are being offloaded.
“Farmers understand that if you milk a handful fewer cows and feed the higher performers more, you will do the same sort of production.”
At the moment he was not seeing many quality cows for sale.
“All we’re really seeing is some herds that were mediocre to poor that didn’t sell last dairy season. We’re seeing the tail-end of those being sold now.”
Surplus young stock could be expected to come up for sale around October-November – dairy beef or young heifers, Lee said.
“We’ll probably see more four-day-old stock on the market because farmers will probably unload 10% of dairy heifers they would usually keep.”
Federated Farmers Waikato president Chris Lewis said destocking was a good option for dairy farmers to get some money during June and July, when dairy company payouts would be minimal to nil.
DairyNZ consulting officer regional leader Phil Irvine said some farmers were leaving the destocking option open for another two or three months to see if the payout improved in the spring.
