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New Zealand milk supply shows new contraction
Livestock farmers in New Zealand produced considerably less milk in September than in September 2020. The contraction that started in August is thus continued. The forecasts of milk prices will continue to rise due to the contraction.
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The total milk supply in New Zealand in September amounted to 2.590.000 tonnes. That was no less than 118.000 tons, or 4,4%, less than a year earlier. The trend of years of growth has stopped for the time being. In September 2020, milk production was still 2.708.000 tons. However, New Zealand milk production is increasing rapidly seasonally towards the peak that is usually reached in October. Milk production in September was 1.193.000 tons higher than in August (1.397.000 tons).
Also below the 5-year average
The significant proportion of the contraction is also reflected in the fact that milk production in September this year was even below the 5-year averages. While the 5-year average milk volume is 2.634.600 tons, this for September this year is 46.000 tons, or 1.7%, lower.
Another increase in forecast price
The recently disappointing production figures have caused a number of investment banks to further increase the expected price for milk for the 2021/2022 season. While dairy giant Fonterra has already raised its forecast several times and expects prices of between NZ $7.9 and $8.9 per kilo of milk solids (New Zealand dollars per 11,5 liters), the investment banks BNZ and Westpac expect prices at the top end of this range.
They now predict an average price of NZ$8.9 per kilo of milk solids for this season. Converted, this amounts to a price of approximately €46.20 per 100 kilos of milk. Fonterra is expected to issue an adjusted forecast for the milk price for the current season in early December.