New Zealand’s milk production for the season to October is down 3.3% on the same time a year earlier. This is a reduction of 21m kg of milksolids or 268,000 tonnes, according to Dairy Companies Association of New Zealand data.
October, the nation’s peak production month, recorded a 2.7% reduction in milk intakes compared to a year earlier which equates to a decline of 7.4m kg MS or 88,000 tonnes compared to a year earlier.
Milk production is still ahead of 2013 levels.
The current El Nino conditions are expected to continue and intensify in the coming months with an effect on milk production.
Drier than normal soil moisture conditions are being seen in almost all of the South Island but most predominantly on the east coast and the top of the South Island. The Wellington region, Taranaki, the Waikato and Northland are also experiencing conditions that are drier than normal according to NIWA data.
Rabobank is forecasting a seasonal 7-10% drop in national milk production compared to the season before. Fonterra is forecasting a 5% drop. AgriHQ is forecasting a 4% drop.
A fall in New Zealand milk production will help to support a recovery in dairy markets but won’t be enough by itself.
Rabobank believes it will be a few months before the global market rebalance. It noted that Chinese milk powder import volumes have recently returned to growth, although it is likely to have to work through some inventories yet.
It is also expecting growth in EU milk production to slow in coming months following the healthy growth since the removal of quotas.
The United States has also showed signs of slowing growth with October’s increase just 0.1% above a year earlier and Australia’s October milk production declining by 0.4%.
