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New Zealand milkers take their foot off the gas
Milk supply in New Zealand remains higher than last year, but the increase in March was considerably smaller than previously seen. Production is therefore falling below the long-term average.
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Milk production in March amounted to 1,763 million tonnes. This is an increase of 0,6% compared to the same month in 2024. In January, supply still showed an increase of 2,6%. Due to a leap year, February does not provide a good reference. In January, supply was still above the long-term average, but the figure for March falls below that.
The declining lead is not a coincidence. Because cows are being dried off earlier than normal, particularly on the North Island, a decline is expected at the tail end of the 2024/25 season, which ends in June. For April, NZX expects a production decline of around 2% and for May the estimated decline is even over 3%. If this comes true, total production in the current milk year will still show an increase of 2% year-on-year.
Fonterra milk price
The milk price forecast for the current 2024/25 season has recently been increased by Fonterra, by far the largest processor in the country, to $10 per kilo of fat and protein. Never before has the payment price been so high. However, the members of the cooperative do not necessarily have much confidence in an improving dairy market, given that there is a lot of interest in fixing the milk price for next season at a lower level of $9,60 per kilo. The scheme was oversubscribed by more than 500 registrations in April.