Thursday, March 28, 2024

Winter milk runs smoothly

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Fonterra’s winter milk season is drawing to a close with supply and demand balanced and little disruption because of lingering drought.
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Between 700 and 800 dairy farms supply winter milk, mostly in the North Island, either contracted or uncontracted.

The season runs from May 16 to July 15 in the North Island and from June 1 to July 31 in the South Island.

There are four payment periods of 14 or 15 days each and in the north the winter premiums this year were $2.85/kg MS in the first and fourth periods and $3.50 in the second and third periods. In the south the premiums were $3.60 and $4.25 respectively. They were unchanged from 2019 and the contracted supply volume was steady.

Fonterra also provides an uncontracted winter supply option at much lower rates under standard terms with no volume commitments.

Waikato regional head Debra Kells said supply and demand for winter milk were balanced and did not change significantly from last year.

Food service market cutbacks for products like UHT cream, cream cheese and mozzarella did not dictate a reduction in winter milk volumes.

Neither did contracted farmers have any shortfall in milk supply because of the drought during summer and autumn.

“Farmers in the top half of the North Island were under pressure due to drought extending into the autumn period.

“But this impacted more on uncontracted milk supply than on our core of contracted milk supply.”

Along with its own liquid milk requirements Fonterra contracts winter supply for independent processors and for the year-round manufacture of UHT products at Waitoa and mozzarella at Clandeboye.

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