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TheDairySite Newsletter - 7 March 2014

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Friday 7th March 2014.
Michael Priestley - Editor

Michael Priestley

Dutch and Spanish Lead Herd Increase Ahead of Quota Removal

Europe’s dairy herd grew in 2013 as the industry advanced to milk quota removal, a new European Commission (EC) report shows.

Significant increases were seen in France, Germany and Ireland, with the biggest lift – of 3.6 per cent – seen in the Netherlands and Spain.

EC analysts say a Dutch average price of €44/kilograms in December incentivised production.

The news, from the EC’s quarterly agricultural outlook, follows bullish post 2015 growth targets set by member states, including a 50 per cent milk output lift by 2020 from the Irish government.

Spain’s herd increase follows the Ministry of Agriculture’s decision to roll out a sector-wide dairy sustainability package.

This was in reaction to the Spanish milk crisis of 2012.

Eighteen months ago, Spanish producer associations were up in arms over a farmgate average price of €0.27/litre being nullified by production costs of €0.40 cents/litre.

Since then, a coordinated industry-wide effort to stop supermarkets retailing milk at a loss has edged the sector towards an even keel.

Similar responses have been reported across other member states. In the UK, the voluntary code of practice was introduced to offer dairy farmers a ‘level playing field’ in negotiations with milk buyers.

This has brought a sea change in the role of UK processors, according to a leading UK analyst reacting to supermarkets slashing milk retail prices this week.

Tesco and Sainsbury’s both cut four pint bottles by 39 pence to £1, reversing the trend ESA Retail had seen of retail values climbing 3.9 per cent over the past year.

‘New world’ dairy markets mean UK dairymen are no longer vulnerable to absorbing competitive milk pricing on this high street, was the analysts assessment.

However, voluntary supply chain reforms have generally meant farmers are getting fairer prices over the past year.

The result, according to the European Commission’s quarterly short term outlook, has been a weighted farmgate price across Europe of €40.4/ 100 kilograms.

Growing Asian milk powder demand should counter huge reductions in dairy buying in North Africa and Viet Nam. The report said China’s buying should mean a stable year for dairy prices in 2014.

Meanwhile, cereal forecasts are positive.

At this early juncture, crop progress reports suggest a strong harvest is possible this year and the International Grains Council and US Department of Agriculture see maize stocks replenishing.

Climatic conditions, barring the west of Europe, have been favourable and the EC has reported 2.8 per cent increase in soft winter wheat sowings.

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End Users 'Rattled' By Cull Cow Prices
Forum to Explore Animal Welfare and the Law
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Value Put on FMD Biosecurity at Australian Outlook Conference
Australia to Play Its Part in Alleviating Global Food Crisis
Drought Down Under: What is the Cost?


United Nations Calls for Pro-family Farming Policies
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EU-US Trade Talks to Resume Next Week
What Are the Health Benefits of Chelated Minerals?
Strong Growth Forecast for Organic Minerals in Animal Feed
What Can Chelated Minerals Do For Cattle?
Call for EU-NZ Free Trade Agreement

   United States

Daily Dairy Trading: Cheeses Gain Further Ground, Thursday
Daily Dairy Trading: Spot Cheese Rockets 11 Cents, Wednesday
Roger Johnson Issues Statement on President's FY 2015 Budget
Daily Dairy Trading: Near Futures Gains, Tuesday
Food Production in US May Need to Change if Climate Does
New US Programme for State Animal Feed Regulators
Daily Dairy Trading: Butter Unchanged After Friday's Spot Surge, Monday
Daily Dairy Trading: Butter Surges, Friday
USDA's Vilsack Speaks About Implementation of Farm Bill
Cattle Futures: Feeder and Live Contracts Close Lower, Thursday
Daily Dairy Trading: Futures Higher, Strong Milk Powder Demand, Thursday
Annual Net Earnings Rise 27 Per Cent at Land O'Lakes

   European Union

Latest EU Outlook: Good Harvests; Rising Milk, Meat Output


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Livestock Production Undergoing Rapid Structural Change
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   New Zealand

Record Forecast Price From Fonterra


BRF Outlook Good as Income Soars


TPP Talks in Final Stretch, Says Singapore Diplomat


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