“It was a great start to the spring and that’s low cost milk to produce,” he said.
“But we’re seeing that come back rapidly on a week by week basis.”
He didn’t wish drought on anyone but believed milk supply would drop back at an even more rapid rate over January, February and March.
A dry patch anywhere in the country would see dairy farmers return to more traditional farming practices, using hay and silage made onfarm and not looking to buy in supplements as they did last year.
Wilson said farmers were good business people and had seen the opportunity to fully feed their cows to make the most of last season’s high milk payout.
But with high stocking rates and a much lower payout in view farmers were already culling more heavily and reducing their use of supplements.
“We need to stay on the grass curve but there’s always the temptation to push production,” he said.
It was critical to maintain New Zealand’s low-cost production advantage because consumer demand was holding at similar levels to those seen in recent years, which he saw as a reason for optimism.
Fonterra’s strategy put it in a good position to take advantage of that thirst for milk despite the difficult position dairy farmers found themselves in for the short term.
“There’s a bubble of milk on the world market and that’s very unfortunate,” he said.
“We have a very strong co-operative but we’re being deeply buffeted by global dairy prices.”
