European Union production fell 2% in June from the same month a year earlier, continuing the reduction in output as farmers culled stock, spent less on supplementary feed and poor weather weighed on the region's producers, Fonterra said in its monthly update.
Annual EU production rose 4% in the year ended June 30, the same pace as in the year through to May 31.
Global production has been falling after last year's slump in dairy prices prompted farmers to rein in output, although recent gains on Fonterra's GlobalDairyTrade auction platform in recent months may revive some of that lost interest.
Fonterra's update shows other regions have also scaled back output, with New Zealand milk production down 1% in July for an annual decline of 2%, while Australian output fell 10% in July for a 3% drop over the past 12 months.
United States production increased 1% in July and grew at the same pace on an annual basis.
The NZ processor expects annual milk collection of 1.52 billion kilograms of milksolids (MS) for the current season, which at the current forecast farmgate payout would mean farmers receive about $8b, up from the $6.1b paid in 2016.
The projected 3% decline in milk collection across NZ “reflects the likely impact of farmers using more traditional practices to manage their businesses within the limits of the current milk price”, Fonterra said.
“Over the past two seasons farmers have reduced stocking rates and supplementary feeding to help lower costs.”
Fonterra’s NZ milk collection in August fell 5% to 95.8m kg MS, with the North Island take down 6.4% and South Island down 0.7%.
Australian collection dropped 12% to 8.4m kg MS.
