The trade weighted index increased by 10.4% in this morning’s GlobalDairyTrade auction.
It was the sixth increase in a row.
Anhydrous milk fat was up 4.9%; butter increased 9.6%; butter milk fat was up 14.3%; cheddar increased8.3%; milk protein concentrate was up 11%; rennet casein increased 1.2%; skim milk powder increased 4.6% and whole milk powder was up 18%.
The price of whole milk powder is the major determinant of the payout so it it likely Fonterra could increase the farmgate price.That would be welcome news for the economy.
It would also be good news for North Island farmers who have been drying off cows and are facing much lower production because of the drought.It’s raining in Dunedin as I type and the temperature has dropped here which indicates a southerly change.
The rain will be welcome here and is needed even more further north where the area under official drought has been extended.
A state of drought has been officially declared in the South Auckland, Waikato, Bay of Plenty and Hawkes Bay regions today by the Minister for Primary Industries Nathan Guy.
The area covered includes the Auckland Council area south of the Harbour Bridge, and all of the Waikato, Bay of Plenty and Hawkes Bay Regional Council areas – including Coromandel and Taupo.
“This is recognition that farmers across the North Island are facing extremely difficult conditions, and follows on from the announcement of drought in Northland last week.
“The declaration of a medium-scale event means that extra Government funding will now be available to Rural Support Trusts. These organisations work closely with farmers, providing support and guidance in what is a very tough time.
“I realise these can be stressful times for rural families, and they need to know who to turn to for support.
“There will also be Rural Assistance Payments (RAPs) available from Work and Income, through the Ministry of Social Development. These are equivalent to the unemployment benefit and are available to those in extreme hardship.
“This decision has been made after consultation with the communities affected, and an assessment from the Ministry for Primary Industries.
“The entire North Island is dry, and I am keeping a close eye on other parts of the East Coast, as well as Wairarapa, Manawatu and Taranaki. Farmers badly need some rainfall during March and April to help prepare for the winter and set up for next spring.
“It’s important to note that support is available from Government agencies in all regions, even without a drought declaration. Farmers should contact IRD if they need help or flexibility with making tax payments, and standard hardship assistance is available from Work and Income.
“It’s great to see that banks are offering flexible finance options in these tough times as well.
“The conditions are also creating challenges for lifestyle block owners, and we urge them to take action early,” says Mr Guy.
Exporters were hoping the drought might help bring the dollar down a bit but it was back up over 83 cents this morning.