Sharechat Logo

Fonterra forecasts 3% rise in NZ milk collection this season

Thursday 22nd June 2017

Text too small?

Fonterra Cooperative Group expects to collect 3 percent more milk from New Zealand farms this season as higher milk prices encourage farmers to lift production.

The country's dominant milk processor forecast its New Zealand milk collection for the current 2017/18 season would rise to 1,575 million kilograms of milk solids, from 1,526 million kgMS in the season ended on May 31, it said in its latest Global Dairy Update.

Fonterra expects a better season ahead for the dairy industry as the world's largest exporter of dairy products benefits from rising prices. Last month it set its initial forecast for milk payments to farmers for the 2017/18 season at $6.50/kgMS, up from its expected payout for the 2016/17 season of $6.15/kgMS. The cooperative said today that last season's New Zealand milk collection was impacted by wet conditions through spring, however more favourable weather conditions through summer lifted production but cooler conditions in May dented collections in the South Island.

"At this stage, collections are estimated to increase by 3 percent in 2017/18 assuming a return to more usual climatic conditions," Auckland-based Fonterra said in the update. "The improved milk price environment should provide support to farmers' milk production plans."

The cooperative noted that it was very early in the season to accurately forecast the total milk collection, and said it would continue to provide updates as the season progresses.

In Australia, Fonterra said it collected 116 million kgMS in the 11 months to May 31, which is 1 million kgMS higher than last season.

"Last year's production was heavily impacted by lower Australian milk prices," the cooperative said. "Favourable autumn conditions combined with lower key input costs have aided the season recovery in milk collection."

The cooperative noted that of the main dairy exporting countries, New Zealand's dairy export volumes lifted 4 percent in the 12 months to March, Australian volumes edged up 1 percent, and US volumes advanced 8 percent. In the European Union, export volumes for the 12 months to February lifted 4 percent. 

China, the largest importer of dairy products, lifted its total dairy imports 10 percent in the 12 months to April. Its fluid and fresh dairy imports increased 13 percent, whole milk powder lifted 8 percent and whey powder advanced 12 percent.

In other Asian markets, dairy imports lifted 7 percent in the 12 months to February, while Latin American imports increased 11 percent, and imports in the Middle East and Africa slipped 3 percent.

Units in the Fonterra Shareholders Fund last traded at $5.94 on the NZX, and have gained 15 percent in the past year.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar stalls amid doubts on US-China trade deal
Tourist numbers perk up in August as Aussies more than offset declining Asian demand
Peters to unions: strikes not helpful; no word on Fair Pay Agreements
Oil and gas critical to global emissions reduction effort - BP
Ebos pays A$34m for medical devices businesses
House price inflation ticks higher as sales volumes recover
Fletcher in $31 mln dispute with ministry over Greymouth hospital
NZ dollar eases as markets fret about US-China trade talks
15th October 2019 Morning Report
CTU pressures govt for Fair Pay Agreements

IRG See IRG research reports