July New Zealand Milk Production Up 5.4% YOY –…
According to Dairy Companies Association of New Zealand (DCANZ), Jul ’14 New Zealand milk production continued the recent trend of production growth, increasing 5.4% YOY. The YOY monthly gain was the 12th in a row, but the lowest in seven months. Jul ’14 production remained 7.9% higher than the three year average July production and 17.2% higher than the five year average July production. New Zealand milk production reaches its seasonal low in June, with Jun-Jul production accounting for less than 1.5% of total annual production, so production changes within these months have a minimal impact on changes in annual production.
New Zealand milk production gains are expected to moderate in future months, particularly on a YOY basis. Recent monthly YOY gains were historically strong partially due to adverse weather conditions reducing production throughout the spring and summer of 2013. YOY milk production gains began to pick up in August of last year which will reduce future ’14-’15 monthly YOY gains, all other factors being equal. In addition, Fonterra revised its forecast Farmgate Milk Price for the ’14-’15 season from $6.00/kgMS to $5.30/kgMS, noting increased volatility in international dairy commodity prices and further downside price risk. Lower Farmgate Milk Prices are expected to temper future production gains.
According to the Fonterra September Global Dairy Update, milk collections across New Zealand were up 4.7% in Aug ’14. North Island collections were up 3.3% YOY in Aug ’14 as the North Island has started the season with favorable temperatures and pasture growth. Aug ’14 South Island collections were up 9.4% YOY as dry conditions in late August have helped to improve soil moisture after a wet start to the season for most farmers. Fonterra forecasts milk collections to grow by 2.0% in the ’14-’15 season, consistent with their previous forecast in May.
New Zealand milk production is highly seasonal with nearly 75% of total milk produced in the six month period ranging from Sep – Feb. Meaningful production data will be limited until anecdotal information regarding September production figures is released. Fonterra will release September collection figures in late October with official DCANZ data becoming available in mid to late November.
New Zealand milk production gains are expected to moderate in future months, particularly on a YOY basis. Recent monthly YOY gains were historically strong partially due to adverse weather conditions reducing production throughout the spring and summer of 2013. YOY milk production gains began to pick up in August of last year which will reduce future ’14-’15 monthly YOY gains, all other factors being equal. In addition, Fonterra revised its forecast Farmgate Milk Price for the ’14-’15 season from $6.00/kgMS to $5.30/kgMS, noting increased volatility in international dairy commodity prices and further downside price risk. Lower Farmgate Milk Prices are expected to temper future production gains.
According to the Fonterra September Global Dairy Update, milk collections across New Zealand were up 4.7% in Aug ’14. North Island collections were up 3.3% YOY in Aug ’14 as the North Island has started the season with favorable temperatures and pasture growth. Aug ’14 South Island collections were up 9.4% YOY as dry conditions in late August have helped to improve soil moisture after a wet start to the season for most farmers. Fonterra forecasts milk collections to grow by 2.0% in the ’14-’15 season, consistent with their previous forecast in May.
New Zealand milk production is highly seasonal with nearly 75% of total milk produced in the six month period ranging from Sep – Feb. Meaningful production data will be limited until anecdotal information regarding September production figures is released. Fonterra will release September collection figures in late October with official DCANZ data becoming available in mid to late November.