Inside Milk
Fonterra expects rack to be out of milk puddle
After a few months with significant losses, the milk supply in New Zealand recovered somewhat in May. Fonterra saw the milk collection increase slightly last season, but does not see that increase continuing next season.
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The milk supply in New Zealand increased at the end of the 2018/2019 season. In May, dairy processors collected 869.000 tons, which is 0,11% less than in the same month last year. In April, supply took a big hit, when it fell by almost 10%.
Although milk supply shows a seasonal decline, production has picked up due to better weather. The drought of the previous months is now a thing of the past. It is striking that the milk supply at Fonterra in May was 3,5% behind last year, while the dairy cooperative accounts for almost 80% of the milk collection in New Zealand.
Growth is leveling off
Now that the production figures for May are known, the balance for the 2018/2019 season can be drawn up. Fonterra has seen its milk collection grow by 1,2% so far, despite the significant decline in the second half of the season. Total milk production in New Zealand increased by 2,4% to 1,884 million kilos of milk solids*.
For the coming season, which starts in July, Fonterra expects milk production to level off. The expectation for total production in New Zealand is a slight increase of 0,4%. This is due to a growth in the number of dairy cows. The first milk price forecast for the 2019/2020 season has been adjusted upwards. However, there are doubts about its shelf life, given the Global Dairy Trade shows a downward trend.
* 1 kilo of milk solids is 11,5 liters of milk.