Record production as farmers await critical price announcements, Dutch farmers set to outpace New Zealand in low-methane dairy tech, and King Salmon grapples with fish mortality as revenue rises.

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Farmers eye milk price as Fonterra is set to unveil strong earnings

Our dairy industry is experiencing a remarkable start to the season, with production hitting a four-year high just as farmers eagerly await critical price announcements from industry giants Fonterra and Synlait.

Fonterra is set to reveal its full-year results today, while Synlait will confirm its milk prices for the 2023/24 season on Monday. 

The latest figures from the Dairy Companies Association of NZ show August's production soared 10% compared to last year, reaching 123.8 million kilograms of milksolids (kgMS). July also saw a healthy increase of 9.2%, hitting 27.4 million kgMS. This marks the highest August production since 2020, outpacing the five-year average by 4.2%.

Fonterra, which handles about 80% of New Zealand's milk, reports a 9% increase in July collections to 20 million kgMS. The co-op's milk director, Lisa Payne, attributes this strong start to early calving and good feed availability across most regions. She notes that warmer than usual soil temperatures and good pasture growth will continue to support milk flows, though Southland farmers have faced a challenging start to the season.

For the current season, Fonterra's forecast stands at a midpoint of $8.50/kgMS, while Synlait's current projection is slightly higher at $8.60/kgMS. However, the NZX's forecast has lifted to $9.27/kgMS, with a range between $9.08/kgMS and $9.68/kgMS, hinting at potential upside for farmers.

Recent Global Dairy Trade auction results have been encouraging. Whole milk powder, which heavily influences the payout, increased 1.5%, while skim milk powder saw a 2.2% rise.

This strong start for New Zealand comes at an opportune time, as other major dairy-producing regions grapple with challenges. The United States is contending with avian flu outbreaks and a heifer shortage, while Europe faces weather issues and animal health concerns, including bluetongue and lungworm outbreaks.

Dutch farmers set to outpace New Zealand in low-methane dairy tech

Dutch dairy will have the chance to utilise low-methane bull genetics from next year. This advancement comes after eight years of dedicated research by Wageningen University in methane reduction, with two groundbreaking tools aiming to cut cow burp by nearly a third.

The initiative, a joint effort with dairy giant FrieslandCampina and genetics company CRV, has determined breeding values for methane output.

The genetic approach alone could trim average methane by 1% yearly, totaling over 25% by 2050. Another development involves using gut bacteria from naturally low-methane cows. Calves get a five-dose treatment of this rumen fluid, which alters their gut microbiome for good. Early data indicate this could knock off another 10% from methane totals.

Combining these methods with current feeding tactics, the Dutch are looking at a potential 30% methane cut by 2050. That's double what they'd achieve with feed changes alone.

The genetics work zeroed in on Holsteins - the backbone of Dutch dairy. Researchers tracked methane from 9000 cows across 100 Dutch holdings, linking burp data to DNA. This confirmed that methane tendency runs in the family, with about a quarter of the trait being hereditary.

Meanwhile, the gut bacteria research kicked off in 2017. It revealed that even when accounting for feed, cow methane varied by up to 24%. This hinted at other influencing elements.

While Dutch dairy lead the charge, Kiwi farmers might need to wait. LIC, New Zealand's largest herd improvement company, doesn't expect to offer methane breeding values until 2026 - at least a year behind their Dutch counterpart.

New funding round opens for agricultural emissions research

The Ministry for Primary Industries has launched its annual funding round for greenhouse gas emissions research, with a keen eye on the agricultural sector. This initiative aims to enhance New Zealand's reporting on emissions from farming, forestry, and other land uses.

A total of $2.9 million is up for grabs in the 2024/25 financial year, earmarked for new projects under the Greenhouse Gas Inventory Research fund. This funding seeks to sharpen our understanding of the country's emissions landscape, providing crucial data for both emissions management and policy decisions.

This year, MPI has outlined ten key areas for research, each vital to the farming community. These range from improving how we estimate the weight of sheep and cattle to exploring cutting-edge satellite technology for measuring feed quality.

One area of interest is enhancing the modelling of dairy cattle, a topic close to the heart of many Kiwi farmers. Another focus is on gathering more accurate data about seasonal dairy supplementary feed intake, which could lead to more precise emissions calculations.

For sheep and cattle farmers, the call for better live weight estimation methods could result in more accurate reporting and potentially fairer emissions assessments. The research also aims to improve our understanding of deer farming emissions, an important niche in New Zealand's agricultural landscape.

There are also plans for a new survey on afforestation and deforestation intentions to give a clearer picture of how our land use is changing over time.

The Ministry encourages researchers and innovators to step forward with their ideas. Applications for funding close on 30 October, with successful proposals to be announced by late February 2025.

New Zealand-Nordic Jersey Collaboration Unveiled

Dairy genetics co-operative Livestock Improvement Corporation (LIC) and Nordic counterpart VikingGenetics have launched a groundbreaking initiative to enhance Jersey cattle breeding, merging genetic advantages from both regions' dairy industries. This collaboration offers new opportunities for Kiwi dairy farmers, targeting improved herd health, efficiency, and overall dairy production.

The project revolves around exchanging genetic material between the two companies, allowing each to identify top-performing bloodlines in their respective farming environments. 

New Zealand Jersey cows have earned a reputation for their exceptional feed conversion efficiency and high milk solid production. These animals consistently deliver quality milk, making them a valuable asset in our pasture-based dairy system. Their Nordic counterparts bring complementary strengths to the table, recognized for their health, fertility, and impressive fat and protein content in milk production.

The breeding program will carefully select cows for insemination with genetic material from top-ranked sires. Each year, the project will involve 10 to 20 elite animals from both companies, with the ultimate goal of identifying superior sires to shape the next generation of Jersey cattle in New Zealand and Nordic countries.

King Salmon grapples with fish mortality as revenue rises

New Zealand King Salmon has released its half-year results, revealing a mixed bag of challenges and opportunities. 

For the six months ending in July, King Salmon saw its revenue climb to $101.7 million, up from $91.6 million in the same period last year. This growth comes despite global cost-of-living pressures, demonstrating the resilience of demand for New Zealand's premium salmon products across all markets and channels.

However, the company's net profit took a hit, dropping to $6 million from $10.6 million a year ago. This decline stems from increased fish mortality and issues with fish size variability, which have rattled consumer confidence.

In response to these challenges, King Salmon is revising its full-year harvest forecast downwards to 6,800 metric tonnes. The company's aquaculture team is working closely with experts to address the issue, with initial trials of mitigating measures showing promise.

A bright spot on the horizon is the Blue Endeavour project - New Zealand's first open-ocean salmon farm. Planning for this groundbreaking initiative is well underway, with the first fish expected to be released in late 2025. This move into open-ocean farming could be a game-changer, potentially boosting production while addressing some of the environmental challenges faced in coastal waters.