There's finally some light at the end of the milk price tunnel
Published 24/08/2016 | 02:30
Finally some light has appeared in relation to milk price. There is now real hope that global dairy prices will continue to rise. The change has come quickly, albeit at a very late stage, with a combined 18pc increase in the GDT auction over the last two weeks.
We all, as milk producers, now require our milk processors to pass on the higher returns quickly to help alleviate the pain being endured at farm level. The signs were there over the last month, beginning with the global slowdown in production and the increased demand for dairy product as it became cheaper.
We must never forget the importance of delivering value to the consumer and the big weakness in that principle is that we do not sell to them directly, which usually results in the processor and the retailer increasing their margin when raw material prices are falling.
We must now hope they pass on the returns to us immediately and regain their normal margin over time. However, because we have no influence at retail level, I believe it is critical we control our costs and strive to manage our dairy farms to survive at low milk prices, and be positioned to take advantage of the good milk price years.
The superb grass growth is continuing. More than adequate rainfall here in the west, along with the high summer temperatures, is driving grass covers. We applied 30 units of urea in the last application and this really delivered, so we will stay with it rather than CAN.
Finally, the price of N has fallen and with urea available below €300/t, it is 10pc cheaper than CAN at €200/t on a per unit basis.
We took out one surplus paddock for bales last week and spread all the yard scrapings and parlour washings on it.
Our grass wedge is showing we need to take out another paddock now so we will cut the first chance we get over the weekend. Rotation length is being extended to 24 days and the cows are going into covers of 1,600kg/dm/ha. Farm cover has lifted to 230kgs per cow.