Agsafe Weekly Rural Report

Finance: The US dollar was steady over the week as markets get used to the Trump trade war & new trade relationships are negotiated. Brent Crude has remained around $61.00/barrel. Just waiting for the petrol prices to reflect the drop!!

Wool: Wool prices The Government buildings should prefer woollen carpets – good start but need more action!!

Beef, Sheep & Venison schedules: Meat schedules are steady. The demand for red meats especially the manufacturing beef in the USA is strong with record sales through March. Venison prices are good, lamb & beef schedules are OK

Dairy Prices. The g/DT lifted 4.6% which was above expectations. WMP lifted 6.2% to $US4374/tn, SMP was up 0.5% & Cheddar prices lifted 12%. There was a moderate offering of 16,700 tonne. It would be helpful if Fonterra lifted the FGM price.

It is tempting to milk on with no retro-payments in June or July, but please watch the cow condition and the pasture covers. Cows need to have a condition score of at least 4.75 at drying off with a pasture cover of 2,250 kg DM/ha unless the stock are leaving the farm. It is ideal to have at least 10 bale equivalent’s of supplement per cow available. These are not rules, but targets to consider.

Jim’s Weekly Rant:

Some comments about the rural industries as the dairy season comes to a close and planning for next season is well underway. I attended the DairyNZ Outlook meeting this week and they, along with Fonterra, are bullish about the dairy and rural industries We were reminded that there were 4.7 million cows in the country in 10,485 herds down 116 herds from the previous year. There are a few new conversions taking place around the Timaru area and total rural debt has dropped $42 billion in 2018 to $35 billion now. The returns to dairy are strong with the payouts and profitability forecasts as follows:


During the season Fonterra increased its payments in January 2025 to $8.50/kg and offered no additional retrospective payment until August 2025 leaving many farmers without any milk income in May, June or July. The cull cow prices have been very good along with the Autumn feeder calvers as the beef industry strengthens, but the cull cow sales will never replace the lack of retrospective milk payments. Over 50% of the NZ beef industry is out of the dairy herd and the demand for manufacturing beef into the USA remains very strong and this has been reflected in the cull cow prices and the Autumn feeder calf prices that have moved from May 2021 at $136.50 to May 2022 at $120.66 to May 2023 at $168.04 with a jump to May 2204 $231.82 and May 2025 $323.84. With the massive increase in feeder calf prices and milk powder prices increasing by 25% over the same period beef schedules will need to continue their upward trend to sustain that part of the rural industry. The bull schedule in May 2021 was $4.68/kg and is now $7.12/kg and prime steer prices have shown a similar movement. Lamb meat prices are good, but a $10 schedule would be better. In the DairyNZ analysis provided the only area of reduced expenditure was in the interest paid as it dropped about $0.55/kg ms over the last 3 years and that has been very welcome in the rural industries. Feed costs continue to increase and are up this year. It has been a tough season in Northland, Waikato, Taranaki & Nelson areas with severe droughts while parts of Southland were extremely wet. Farmers have used additional supplement to get through the weather conditions and hopefully they have sufficient on hand for the coming winter period. A few other markers offered included the average debt is around $18/kg ms, tractor sales have not increased, farmers are asset stripping their farms before selling, that is, they are subdividing off sections and house if they are available, and there is an increased interest and use of technology. Fonterra is hooked in with Nestle and Mars to produce “low emission” milk and approximately 34% of the farm gate milk (FGM) price is from milk sales outside the Global Dairy Trade (g/DT) auction but there was no statement as to how much the Nestle and Mars sales added to the FGM price. The low CO2 emission farms that will receive the premiums will be mostly located in Canterbury as their mythological calculations are better than T

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