Dairy market analyst Mark Voorbergen painted a relatively pessimistic short-term picture for global dairy markets in 2016.

Speaking at the Teagasc national dairy conference in Kilkenny, Voorbergen suggested that the first three months of 2016 could be very difficult for milk price.

He said: “The markets are weak and, so far, only supply in New Zealand and Australia is down. The demand boost is not yet apparent and low oil prices are reducing the purchasing power of the big dairy product-importing countries.”

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Voorbergen did see some potential for the market returning to better milk prices in the second and third quarter of 2016. He said: “Milk price in China is expected to be 15% lower next year and we expect that most of the stocks they had in hand will be sold and they will have to return to the market. I see a gradual transition to a better balance between supply and demand, but some changes in supply are needed for the market to rebalance.”

In the long term, Voorbergen said that the average milk price could be between 1c and 2.5c/litre higher over the next six years than the average of the previous six years. He said: “The biggest influence will be currency changes and the value of grain. I’d expect milk prices between processors to open up more as product mixes become more differentiated and concentrated and prices of individual dairy products are more variable.

The big unknown according to Voorbergen is how much surplus milk will develop when price is below the cost of production as it is at the moment in many of the big dairy-producing countries. Voorbergen said: “Looking at the financial figures this week, only the New Zealand dairy farmers are hurting at the moment. Milk price in the EU and US are not good, but not really that bad either, and most dairy farmers in those regions are still in the ‘give it all in mode’, so I’m not expecting any major supply contraction in the EU and US.”

To put this into perspective, Voorbergen said: “The growth in milk just for the month of October in Holland was 230 million kg, while the decline in New Zealand and Australia was only 90m kg. It goes to show that the EU will be important on global markets. Yes, New Zealand is at peak now, while the EU is approaching the trough in terms of supply, but there is a significant gap which means stocks are building in parts and not in others.

The US is another big player in the market but, effectively, the US has been detached from the global supply market developments over the last year. US milk supply is down in states like California (drought), but up and staying up in states such as Wisconsin, where milk price is 10c to 15c/litre ahead of Europe and there is plenty of feed and water on farms.

Chinese imports are seen as the big determinant of the demand increasing globally and, to date, they are not strong. Voorbergen predicted that they will end the year at about 8bn kg, which is well down from the 10.3bn imports in 2014. He said a lot of that increased buying in those years was speculative, where traders were making a margin by buying product one month and selling it two months later and making a margin on a rising market. The end result was while some made a profit, a lot of product was sold at a loss.

In effect, what it means at the moment is that a lot of 2015 and 2016 will be stock absorption as most of the 2013/14 stock build-up will be gone as most of those products only have a 24-month shelf life.

Currently, EU dairy product is prohibited from entering Russia, but Russia is another big player inactive in the market that could swing the market if it came back to the buying table. Voorbergen said he saw no major indications that Russia would return anytime soon. He said mechanisms are at play within Russia to make cheese copycat products, where casein and milk protein concentrate (unprohibited EU products), for example, are mixed with vegetable oil to make what looks like cheese.

The official ban on EU product is until August 2016, but Voorbergen suggests that sentiment will rise if product starts getting back into Russia.

Dairy farmers at this year’s conference attended a choice of workshops for the afternoon session. Topics discussed were grassland and business management, herd health and breeding and genetics.

One of the key messages from one of the grassland workshops is to focus on setting appropriate stocking rates, which are closely linked to the grass growth potential of the farm.

Donal Patton from Teagasc Ballyhaise suggested that optimum stocking rates are ones where the animal liveweight per tonne of dry matter feed available was in the order of 90kg to 100kg – ie the comparative farm stocking rate. For a farm growing 16t of grass per year and feeding less than 500kg of meal, this is a stocking rate of about 2.9 cows per hectare, but lower if less grass is grown.

Similarly, the bigger the cow (liveweight) the higher the feed requirement, so comparative sticking rate which is tying size of cow, feed input and relating that to the volume of grass grown, is the way forward.

He said that where stocking rates increase over and above optimum level, performance per cow and per hectare will decline as the proportion of grass available for milk production declines and the proportion of grass used just to maintain the herd increases.

He cautioned against setting a high stocking rate, which requires a routinely high level of feed supplementation to fill grass deficits, citing the negative effects on grass utilisation where feed supplementation is high.

Crossbreeding

At the ‘‘Breeding the Right Cow for your Farm’’ workshop, Brian Hilliard, a dairy adviser based in Co Waterford, presented data from the Deise 1250 group showing that over the last five years, the average herd EBI has increased by €36, milk solids per cow have increased by 41kg, calving interval has decreased by 16 days and the six-week calving rate has increased by 15%. He said that 16 of the 20 members have been crossbreeding with Jersey.

Andrew Cromie from ICBF presented data which showed that the average Jersey crossbred herd was outperforming the average Holstein Friesian herd.

However, Andrew selected a dataset from within the larger dataset to show that when you compare Holstein Friesians with the same EBI compared with Jersey crossbred herds of the same EBI, there is little difference. When asked about the future role of the Jersey crossbred in the national breeding programme, he said that to get a multibreed programme going for the Jersey breed is a large-scale project in itself.

He said that Irish farmers need to be using more Jersey test bulls and suggested that the best place

The Philip Blake Engineering (PBE) Slurry spike is the brainchild of Philip Blake, who grew up on a 130-acre dairy farm in Devon, England.

In 2003, Philip started working spreading slurry for hire using a standard umbilical system. It was this hands-on experience which played a major part in the design of the Slurry Spike.

“From my years spreading slurry and sitting in the tractor, I gradually designed the Slurry Spike in my head, I just taught there