Bad moon rising?

NoEvil

Hear no evil Pic credit: Apartline.de

It’s no secret, the last couple of years on the farm have been bloody tough. The 2015 drought cut deep here, only to be followed by the dairy debacle of 2016. Now the historic agreement to sell Australia’s last big co-op has us in unchartered waters.

We just need a bit of a breather to recover and keep our heads above water.

During the last two years, we’ve closed down spending as much as possible. We haven’t sacrificed feeding cows or looking after our soils but, beyond that, if it could wait, it did.

It means we have some maintenance to catch up on, especially the farm laneways that the cows use to get to and from their paddocks. Maintaining tracks is expensive and we have the equivalent of a very good year’s profit to make up as well as new debts to repay. It hasn’t been a very good year yet.

So, you can imagine how it felt when I heard Freshagenda’s revised forecast for next financial year, which basically said milk prices are headed down again. Not good. Demoralised and, honestly, rather cranky.

But is there really anything to worry about?

After all, a year (or even half of one) is a long time in dairy commodity pricing. Freshagenda notes there are plenty of variables, like exchange rates, the weather in New Zealand and even the Russian ban on dairy products, that can all still make a big difference to the outcome.

This farmer’s left wondering whether it’s safe to let the moths out of the cheque book for that much needed maintenance.

If I spend too much, there might not be enough left in the kitty for another tight year. If I keep the hatches battened down, the tracks will cost a fortune to bring back to square one in another two years’ time.

While all of that is a big deal for me, others argue there’s much more at stake. There’s the psychological impact on farmers for a start.

If social media is any guide, plenty of farmers have had a gutful of industry turmoil and tight times. Some of them will curl up into a little ball, some will grin and bear it, while others will simply walk away.

I’ve heard farmers suggest it’s irresponsible to publish something like that when the industry is on a knife edge. Others worry that the processors will use commentary like this to jawbone the farmgate milk price down.

Either way, they argue, it could help to dampen milk production for another year, reducing Australia’s ability to be an efficient, reliable exporter.

With all this in mind, it’s not surprising Freshagenda has copped a bit of flack. Its founding couple, Jo Bills and Steve Spencer, shouldn’t be surprised. Dairy Australia famously stopped issuing similar forecasts after similar blowback.

Asked for comment by Milk Maid Marian, DA explained its approach this way:

“Dairy Australia exists to provide our farmer stakeholders with the most accurate and up to date information so they can make informed decisions around their business practices.”

“Our role in this space is to provide an unbiased view on current market trends and drivers, through publications like the Situation and Outlook report.

“Milk pricing varies greatly from processor to processor and farm business to farm business. Our approach is to provide the information and insights that farmers can apply to their own context, and draw much more meaningful conclusions than an industry ‘average’ price.

“DA moved away from providing an exact prediction on milk pricing for a number of reasons, these include:

–          The risk of eroding competition for milk and unduly influencing market decisions made by processors.

–          The industry is now in an environment where there is significant variation in processor prices meaning that no price will ever apply to everyone.  This has not always been the case.

–          Milk pricing is extremely complex and there are too many variables for DA to confidently predict a single/universal price.”

It provides all the ingredients for a powerful argument against the proposed $2 million milk price index that seems to have gone very quiet.

On the other hand, Freshagenda is not the only one pointing to a softening in global dairy commodity prices. A quick Googling will reveal analysts from around the world coming to the same conclusion that this cycle is already turning. The processors all know it and can point to any amount of evidence for a lower new season’s price if they want.

Freshagenda has simply put that into context for Australians.

Yes, they’ve also put a number on it, or “numbers” I should say as they’ve actually offered a fairly broad price range that comes with the expected caveats regarding changing conditions.

When the dairy debacle of 2016 unfolded, it caught farmers by surprise. Many asked why they weren’t warned. We can’t have it both ways.

The question is: would you want to know if there’s a bad moon rising? At spreadsheet-time, yes, I would.

 

 

How you can tell winter is coming

New pastures are flushed with growth.

New pasture soaks up the sun

New pasture soaks up the sun

The ground is still warm and dry enough for bare feet.

TractorWork

The cows are ebullient.

ButterHeads

The brilliance of our wildlife is unmissable.

The marvellous moorhen

The marvellous moorhen

But, there’s this.

Is this the beginning of the end?

Is this the beginning of the end?

Winter is inevitable and so are rubber boots. In turn comes twisted, slithering southwards socks – enough to test the patience of a milk maid at the best of times, let alone when struggling through mud.

My trusty ones from last season have had it, so now I’m on the hunt for socks that will stay true all day long. There are plenty of great work socks for blokes but their wide toes mean uncomfortable bunches at the tips of my boots. Any recommendations?

A purple blister on the weather map is coming to get us

Holy cow

Holy cow

It’s not a good sign when the local weather forecaster gets a spot on ABC Radio’s National news. Our forecast is so shocking that, yes, it made headlines today.

A massive chunk of Victoria is about to go underwater and, with it, a massive chunk of our farm. We’ve had an inch of rain in the last two hours and the prediction is for between 51 and 102mm tomorrow, followed by another 20 or 30mm over another couple of days.

I’m thankful for the undulations at the southern end of the farm. The cows will at least be safe.

I’m also thankful for the Bureau of Meteorology’s timely warnings. It gave us time to:

  • Set up safer paddocks for the cows
  • Ask Scott, the grain merchant, to deliver more feed before we get flooded in
  • Remove the power units from the electric fences on the river flats
  • Bring all the eight new calves born during the last 48 hours into the warmth of the poddy shed
  • Stock up at the supermarket
  • Pile the verandah high with dry kindling and wood to keep the kids warm

As the flood sets in, we’ll be:

  • Offering extra TLC for newborns and freshly-calved cows
  • Feeding out more of our precious and rapidly dwindling stock of hay while hitting the phones looking for more ridiculously scarce fodder
  • Keeping an even keener eye out for mastitis
  • Walking the cows extra gently to the dairy to reduce the risk of lameness
  • Hoping like hell that the damage to the fences and tracks isn’t too bad
  • Monitoring the condition of paddocks to minimise pugging (mud, mud, mud)
  • Stocking the dairy snack bar with a bottomless supply of soup and raisin bread

It’s often said that good farmers only worry about what they can control. I’ll do my best!

Am I in a dairy crisis?

A group of young Gippsland dairy farmers say times are tough but not at crisis point, said well-known dairy consultant John Mulvany during an ABC Radio interview yesterday.

When I ask myself whether it feels like I am in a “dairy crisis”, the answer is a perplexing “yes and no”.

We will get through this year battle-weary but pretty much unscathed and the bank is still very supportive. The co-op recently delivered us a modest price increase, which included back-pay and that was very helpful. I hope I’m not jinxing myself by saying this but the autumn break has arrived, everything is green and growing and new seed is in the ground.

But when I look at why things are undoubtedly “tough”, that’s when it feels like a crisis.

International dairy commodity prices are good
Right now, we are actually being paid very well. It just doesn’t feel like it for two reasons. First, those excellent prices are in US dollars, which means that by the time you convert those prices into Aussie dollars, the prices are a lot less spectacular. Second, the cost of making milk has increased faster than milk prices have risen.

Given that international dairy commodity prices are notoriously volatile, I’m not looking forward to the next cycle, when they are considered “weak”.

The strong Aussie dollar is not going away anytime soon
Business commentators are telling Australian exporters (and around half of our milk is exported) to get used to a strong Aussie dollar. It’s here to stay.

Input costs are tipped to keep rising
The price of power, refrigerants and fuel is only going to keep rising, along with wages and, in the long term, fertiliser. Interest rates cannot be expected to remain so low forever, either.

Smart farming programs withering as R&D slashed
There have been savage cuts to agricultural R&D right around the country, with massive job losses here in Victoria. We are going to have to look further afield for innovation leadership.

Conflicting messages about the future of farm-gate prices
We are constantly told a massive protein shortage will transform dairy farmers from paupers to princes. As dairy industry commentator, Steve Spencer, writes in the latest edition of the Farm Policy Journal:

“One of the significant challenges faced by the industry – especially export manufacturers who can’t keep up with customer demand – is that too few of their milk suppliers have bought into the story that the future holds great opportunity.”

Glad you noticed, Steve. And little wonder we’re not buying the story. Not only are we no more profitable now than we were a decade ago when “the story” was first floated, just a few weeks ago, ABARES forecasted a 36 cents per litre farm-gate price within five years – well below our cost of production.

Steve goes on to say that the dairy industry is missing many key ingredients “…building confidence, showcasing success, positive esteem…” and then poses a “…critical question for all parts of the industry: how to motivate people to look long, adjusting their businesses and attitudes to accept the cycles of the market and cashflow as inevitable?”.

Steve, I think that is what we have done and that is why some call it a dairy crisis. Rhetoric no longer cuts it. But I reckon you’re right that we farmers do need to start thinking about the big picture beyond the farm gate so we are ready not only to face the future but to recast it before it’s too late to find our feet in the new world order of dairying nations.

You’re better off playing two-up than believing the weatherman

Grazing in March

An amazingly good pasture for March

 

If you tossed a coin to issue the next three monthly outlook, you’d be more accurate than the weather gurus at the Bureau of Meteorology. I am not being cheeky either – it’s a fact reported by the Bureau itself.

The seasonal outlook below shows a relatively dry winter is expected in our part of Australia (a good thing).

National Rainfall Outlook

What we're supposed to be getting

But when you dig a little deeper, you find this matching map (not a good thing):

Seasonal Climate Outlook Assessment

The pink says "We get it wrong more often than we get it right"

We are in one of the pink zones. If I understand it correctly, this means the Bureau’s outlook is right 45-50% of the time. In other words, “If we say it’s going to be dry, it’s more likely to be wet”.

Don’t think I’m suggesting the weather forecasters are dummies. Absolutely not! Just as no dairy farmer would suggest she has a handle on all the natural systems that make a farm tick, weather is notoriously, ridiculously complex and difficult to predict. I take my hat off to those who get it kinda right most of the time.

What I don’t understand is that if the Bureau’s learned fellows are so honest as to say: “We think we have a 45% chance of getting this right”, why issue a forecast at all? Maybe they just love to use their colourful highlighters? 😉

Rain post

Bah humbug! I am going to hang washing out on the line this morning, despite the Bureau’s flash flooding warnings because my diligent preparations for yesterday’s forecasted deluge seems to have put a hex on the arrival of the huge east coast low.

For a week now, the forecasters have been issuing dire alerts, urging us to get hay into sheds and move cattle to high ground. I duly grazed out the flats and arranged for the cows to go to the slopes, cranked the dam siphon into action for a day (flooding the swamp paddock in the process), brought in all the loose garden furniture and watched the radar.

A huge storm raged all day in Bass Strait but nothing arrived here. Even the easterly wind faded away to nothing and small puffy clouds arrived from the south-west. Disgusted, I finally drove up the dam wall to turn off the siphon. When I turned to see how much of a mess I’d made of the paddock in the siphon’s path, this is what I saw:

It had snuck up on me

It had snuck up on me

Wheeling around towards the south-east, I was astonished to see it even had its own “twister”!

Twister

The finger of doom?

Well, I reckon we’d be lucky to see 3mm in the gauge this morning.

The thinking behind this post is that the more public I go with my disbelief, the more likely the weather gods will shame me. So, please tell everyone you know that Milk Maid Marian says it’s not going to rain today. I dare you!

I’m not afraid of La Nina

So, she’s on her way back, is she? La Nina wreaked havoc across Australia last season and forecasts predicting her return this summer have hit the headlines. But I’m not scared of her. In my region, La Nina is no grand dame.

In fact, the Bureau of Meteorology’s analysis of 12 La Nina years shows average rainfall in our region of south-east Victoria.

I had no idea this was the case until I subscribed to the fascinating and very informative Victorian DPI program, Milking the Weather. A more realistic seasonal outlook means we need to look at a whole series of climate drivers that Milking the Weather nicknames “Climate Dogs”. In their September newsletter, the DPI’s Bree Walsh and Zita Ritchie say:

“It is easy to look to the sky, irrigation dams and soil moisture levels and think the good old days of plenty of rain have returned. However, based on history an average outlook could mean rainfall could go either way, as rainfall events rely on a good moisture feed from the Pacific and/or Indian oceans.”

With this in mind, the smart money is not on building an ark or buying in vast quantities of fodder just yet. As Bree and Zita conclude:

“In summary, 2011 looks unlikely to mimic 2010, taking into account the current climatic indicators and model predictions. When comparing the seasonal outlook from year to year, it is important to keep risk in the back of you mind. Many factors affect our weather, with each region having their own specific risks which need to be considered in the context of the broader model forecasts. Managing climatic risk is complex, one of the hardest management decisions is around how all of these outlooks come together and affect your farm.”

Getting ready for another downpour (will it flood again?)

Signs of the flood on gates

The hallmarks of the last flood remain while we prepare for the next one

We’ve been flat chat the last couple of days, preparing for the rain forecast for tonight and this week: another couple of inches, although the expected totals seem to be changing every few hours. I suspect this means it could be anything!

Fresh sawdust has been added to the calf shed while it’s dry. We’ve been grazing the most low-lying and distant pastures first, while setting up temporary fences on the higher ground. Repairs to the fences on the river flat have been called to a halt for now. Extra silage has been delivered while it’s accessible.

In fact, any outdoor job that could be done is being done. Now we can only cross our fingers.

 

At least there aren’t white caps in paddock 17 today

Flooded paddock 17

Flooded paddock 17

Paddock 17 and part of 18 are underwater today but at least there are no white caps. White caps? Yes, the ones sailors dread on an angry sea were whipped up in paddock 17 a week ago. The waters have barely subsided since then and all of the three forecast models I follow on OzForecast.com.au are predicting lots more rain in the next few days.

I’m a weather geek at the best of times but now I’m now compulsive about checking the forecast. Almost all our ready-to-graze pastures are on the river flats across the gully, which is infamous for flash flooding. A big downpour on the range to our south would see the cows marooned. There’s no bridge – only a concrete fjord – and I reckon building one would certainly usher in a drought!

Seriously though, I know many dairy farmers are facing much tougher times than we are with this amazingly wet season. Good luck to those still struggling with floods. Our thoughts are with you.