CellCheck_Newsletter_January_Final

CellCheck ANIMAL HEALTH IRELAND NEWSLETTER

JANUARY EDITION 2017

CELLCHECK PROGRAMME UPDATE

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GUEST CONTRIBUTOR Joe Collins, Managing Director of Dairy Trading & Ingredients Division, Ornua

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AHI gratefully acknowledges the financial and other contributions of FBD, Teagasc, UCD and our other stakeholders to the CellCheck programme. NATIONAL MASTITIS CONTROL PROGRAMME CellCheck AnimalHealthIreland.ie Animal Health Ireland, 4-5 The Archways, Carrick-on-Shannon, Co. Leitrim, N41 WN27

CELLCHECK PROGRAMME UPDATE

LOOKING FORWARD TO 2017

Finola McCoy, Programme Manager

W elcome to our new look January edition of the CellCheck newsletter, and the first of 2017! I hope you had a chance to relax and have a well-earned break over the festive season, before spring rolls around again. 2016was a busy year, witha lot of activity and training, in particular the delivery of CellCheck Farmer Workshops for participants of the Dairy Knowledge Transfer programme. This first phase of workshop delivery will continue until the end of this month, after which there will be break as the usual spring activities will become

a priority for both farmers and their service providers. During this time, we will do a review of the workshop activity to date, and prepare for the second phase of workshops, which will start once the spring peak has passed. We will also continue to develop the next phase of service provider training, and will keep you updated on proposed events once details are available- so watch this space! I would like to wish all our readers a happy new year and thank you for your participation, support and feedback throughout 2016.

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CELLCHECK NEWSLETTER JANUARY EDITION 2017

GUEST CONTRIBUTOR

MILK PRICE: IS IT REALLY ON THE INCREASE?

Joe Collins, Managing Director of Dairy Trading & Ingredients Division, Ornua and AHI Board Member

F arm-gate milk prices have been extremely volatile for the last decade and the last three years have been no different. Prices dropped from c.34 cent per litre (cpl) incl VAT in 2014 to c.23 cpl in April 2016 before increasing to 28 cpl in October. The question on every farmer’s lips now is whether prices can continue to recover and be maintained into the 30-33cpl range for 2017. To answer this question it is important to understand why prices have been so volatile. As any economist will tell you, it is the relationship between supply and demand that determines prices, and the dairy sector is no different. If supply increases without a similar or greater increase in demand, then farm-gate milk prices will fall and vice versa. Global milk supply increased sharply from early 2015, largely driven by EU countries as farmers increased herd size to prepare for the removal of milk quotas. US supply also increased with cumulative global flows in 2015 up by 2% compared to 2014 and 6% compared to 2013. While milk flows shot up, demand weakened. China, the world’s biggest buyer of milk powder, reduced its powder import volumes by a third between 2014 and 2015 while political difficulties closed the Russian market to EU and US dairy trade in August 2014. The Russian market previously accounted for a third of EU cheese and butter exports.

Despite these demand setbacks, EU exporters were successful in finding replacement markets in 2015, namely in the Middle East and North Africa (MENA). However, with oil prices falling from $100/barrel in late 2014 to $40/barrel during 2015 and early 2016, the purchasing power of oil-exporting countries declined sharply.

The main driving force behind this turnaround has been a contraction in global milk supply with EU, Oceania and Argentinian farmers reacting to lower farm-gate milk prices by reducing herd size and feed supplementation .

This was another blow to demand. With milk supply now outstripping demand the inevitable happened; dairy export prices for cheese, butter and milk powders weakened, which in turn weakened farm-gate prices. Export prices fell by 25% on average between October 2015 and March 2016 with “oil dependant” powders markets most impacted.

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CELLCHECK NEWSLETTER JANUARY EDITION 2017

GUEST CONTRIBUTOR

Fast-forward to present day – farm-gate milk prices have increased to 28 cpl. What has changed? The main driving force behind this turnaround has been a contraction in global milk supply with EU, Oceania and Argentinian farmers reacting to lower farm-gate milk prices by reducing herd size and feed supplementation. Poor weather also affected supply and global flows have dipped below 2015 levels every month since June 2016. Consequently, production of dairy products slowed and prices increased. The price recovery was aided by EU Intervention buying of skim milk powder (taking 350,000mt of product off the market) and the swiftness of the supply contraction, with many buyers caught short in the run up to the Christmas holiday period. A recent spike in Chinese buying has also aided powder prices. Will milk prices continue to increase through 2017? Again, supply and demand trends will be the key determinant. Farmers tend to react faster to rising milk prices than falling prices. While US milk flows look set to expand further, global supply is likely to remain constrained during the first

half of 2017 as Oceania, Argentinian, German, French and UK farmers take breath after a sustained period of low milk prices. This means farm-gate prices could trade in the 30-33 cpl range in the first half of 2017. However, with farm-gate prices increasing, global milk supply will likely recover as the year progresses. With Chinese buying expected to grow at a slower rate, oil prices forecast to remain below $60/barrel for the year, the possible extension of the Russian embargo and continued uncertainty regarding the impact of Brexit and President Trump’s election, global demand in 2017 is likely to remain muted as higher prices dampen domestic and export demand. The EU Commission recently forecast that global import demand will continue to grow for the next decade (albeit at a slower rate compared to the previous decade) and milk prices will eventually increase above 32 cpl, but only from 2022 onwards. In the more immediate future, it appears that an eventual recovery in global supply through 2017 combined with muted demand and excess Intervention stocks is likely to dampen the potential for further price increases in the second half of 2017.

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CELLCHECK NEWSLETTER JANUARY EDITION 2017

CELLCHECK TIP OF THE MONTH GOOD HOUSING MEANS HAPPY, HEALTHY COWS! M astitis occurs because bacteria get into the udder through the teat end. These bacteria can come from other cows (via milk), or from the environment. When cows are housed, their exposure to mastitis – causing bacteria in the environment will be higher. Bacteria such as E. coli and Strep. uberi s, which survive in the cow’s environment, can cause severe cases of mastitis. Plan ahead, and reduce the risk of mastitis problems in your cows and in-calf heifers this spring. [Click here] for previously published tips

Reduce the risk of mastitis by making sure housing is CLEAN, DRY and COMFORTABLE

1. Cleaner houses = cleaner udders = less bacteria at the teat ends • Scrape passageways, cubicles and yards at least twice a day, or run automatic scrapers at least 6 – 8 times daily • Don’t forget, cubicle mats and bedding should be clean! • In straw-bedded houses, bedding should be refreshed daily 2. Dry housing makes it harder for bacteria to grow • Good ventilation is essential • Liming of cubicles (twice daily) will help keep them dry • Make sure straw bedding isn’t damp. Wet knees after kneeling on it means it’s damp! 3. Comfortable cubicles = cows will use them more=cleaner udders and teats 4. Don’t overstock cubicle housing this winter-aim to have 10% more cubicles than cows

Don’t forget about your in-calf heifers! Good environmental conditions now are just as important as when they join the main herd.

For more information, see CellCheck Farm Guidelines 1 & 16, and Management Note L

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CELLCHECK NEWSLETTER JANUARY EDITION 2017

CELLCHECK REGIONAL COORDINATORS

A Resource and Point of Contact for CellCheck Activities in your Area

Paul Cullinan 087 2470803 Mayo/Sligo Aurivo

Brendan Dillon 087 2626851 Cork/Waterford/ Wexford/Wicklow Glanbia

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Tom Starr 087 6697010 Tipperary/Limerick Arrabawn Co-op

Sean McCarthy 066 7163200 Kerry/Clare Kerry Agribusiness

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John Fitzpatrick 086 0426567 Kilkenny/Laois/Carlow/ Kildare/Dublin Glanbia

Sinead Treanor 023 8822369 West Cork Carbery Group

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Tom Downes 087 2564669 Longford/Monaghan Lakeland Dairies

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Andrew O’Neill 086 1836505 Tipperary Tipperary Co-Op

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CELLCHECK NEWSLETTER JANUARY EDITION 2017

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