April 17, 2012

 

 

The long spell of pasture conditions for New Zealand, which have cause rising milk production, may be disrupted with the close of the La Nina, which is also seen as increasing rain in the US.

 

The NZX New Zealand pasture grow index, much watched as an indication of milk production in the world's top dairy exporter, has in recent weeks extended its winning streak, "tracking at approximately double the historical normal for this time of the season", Agrifax analysts said.

 

"The index shows just how great conditions have been for growing grass in New Zealand this year," after two years when pasture condition was far above average too, ranking within the top 20% of historical readers for nearly all of 2010 and 2011.

 

Bumper New Zealand milk production, which grew 10.3% in January, according to industry data, has been viewed as major factor in depressing world prices.

 

However, the run of near-perfect pasture may end with the close of the long period of La Nina weather pattern which are historically associated with wetter weather in much of New Zealand, and Australia.

 

Indeed, Australasian dairy farmers may be in for a spell of dry conditions if the La Nina is followed by an El Nino, associated with warmer Pacific water temperatures which may be on their way.

 

"It is likely that we experience El Nino conditions in the coming dairying season," Agfrifax said.

 

The El Nino patterns mean that New Zealand "tends to experience stronger or more frequent winds from the west in summer, leading to drought in east coast areas", if bringing rain to western areas.

 

Australian meteorologists last week warned that the equatorial Pacific had warmed by about 0.2-0.4 degrees Celsius during the previous fortnight, while noting a 70% chance of a two-season La Nina, as the world has experienced, being followed by an El Nino event.

 

According to the Australian Bureau of Meteorology, an El Nino brings a "high probability" that eastern and northern Australia, major dairy areas, "will be drier than normal".

 

During the last El Nino, in 2009-10, milk production declined in Australia, while slowing its rise in New Zealand, where output has been on a long-running trend upwards, fuelled by conversion by farmers to dairy from sheep.

 

The change in weather pattern has also been linked to the increased rain in the US, which is currently seen as boosting crop production potential, with the downside of heavy moisture disruption to sowings mitigated by the rapid start farmers have made in plantings.

 

"Usually, as the La Nina declines, the weather grows wetter than normal in the central US including the northern Great Plains and upper Midwest," Gail Martell at Martell Crop Projections said.

 

"Perhaps this is a turning point as the forecast has finally turned wet."

 

At broker Allendale, Paul Georgy said that over the weekend, "most of the Corn Belt received well needed moisture. Some areas received more than needed as three-plus inches fell."