NZ milk collections by Fonterra grew by 24% in May, with stronger gains in the North Island reflecting much improved conditions over last season.
Fonterra Australia also recorded gains in milk production, reducing the season to date deficit to 1.7% from 3% for the season up to April. Milder than average conditions encouraged pasture growth.
The minimum shares required to supply Fonterra is lower than forecast, at 1421 shares down from 1423. This is partly due to Fonterra widening the eligibility of contract supply. Contracts are now open to farm sales, existing Farmer Shareholder growth milk and business restructures such as succession planning. Contracts require less upfront investment, although sharing up in six to ten years is required.
The easing in contract requirements will help to retain, or grow Fonterra's milk supply.
In global commodity markets, Fonterra assesses that dairy exports totalled 14.2 million tonnes, 3% higher for the year up to February 2014. This growth is attributed to the EU, NZ and US.
Source: Fonterra Global Dairy Update
Supply gaps in China are reported to be widening, with stronger consumption growth over domestic production leading to an estimated supply gap of 10 billion litres and counting.
