New Zealand Milk Production Update – Jan ’17
Executive Summary
New Zealand milk production figures provided by Dairy Companies Association of New Zealand (DCANZ) were recently updated with values spanning through Dec ’16. Highlights from the updated report include:
The YOY decline in production volumes experienced during Dec ’16 was the third largest experienced throughout the past 15 months on a percentage basis but the smallest decline experienced throughout the past three months. Unfavorable weather conditions experienced across most dairying regions of New Zealand throughout the final quarter of 2016 contributed to the recently experienced significant declines in production, however conditions began to improve throughout the month of December.
When regionally weighted by milk production, rainfall reached a ten year seasonal high during November, contributing to soil moisture deficits reaching a record seasonal low.
Rainfall remained higher on a YOY basis throughout December, but declined to below ten year average figures, contributing to soil moisture deficits returning to more normal levels.
New Zealand farmgate milk prices reached a nine year low during the ’15-’16 production season as concerns over a potential El Niño event mounted while global milk supplies expanded significantly, particularly from within the EU-28. The ’16-’17 farmgate milk price forecast has been revised higher a total of three times over the past five months, however, as a gradual rebalancing of global supply and demand continues to take place. The current ’16-’17 farmgate milk price forecast of $6.00/kgMS is 53.8% above ’15-’16 price levels and 7.8% above three year average prices.
New Zealand slaughter rates accelerated throughout the final months of the ’15-’16 production season, reaching record seasonal highs. Overall, ’15-’16 annual New Zealand cow & heifer slaughter rates finished up 3.2% YOY, reaching a record annual high. New Zealand cow & heifer slaughter rates have declined by 11.1% in total over the first seven months of the ’16-’17 production season, however, as an 18.9% decline in slaughter rates has been experienced throughout the past four months. New Zealand cow & heifer slaughter rates declined by 19.1% YOY during Dec ’16, reaching a three year seasonal low.
- New Zealand milk production volumes finished lower on a YOY basis for the third consecutive month during Dec ’16, declining by 2.7%. New Zealand milk production volumes finished at a four year low for the month of December.
- ’16-’17 New Zealand farmgate milk price projections were revised higher for the third time in the past four months during Nov ’16, increasing to a value of $6.00/kgMS. The current ’16-’17 farmgate milk price forecast is 53.8% above ’15-’16 price levels and 7.8% above three year average price levels.
- New Zealand cow & heifer slaughter rates reached a record annual high during the ’15-’16 production season but have declined by 11.1% on a YOY basis throughout the first seven months of the ’16-’17 production season. New Zealand cow & heifer slaughter rates declined by 19.1% YOY during Dec ’16, finishing at a three year seasonal low.
The YOY decline in production volumes experienced during Dec ’16 was the third largest experienced throughout the past 15 months on a percentage basis but the smallest decline experienced throughout the past three months. Unfavorable weather conditions experienced across most dairying regions of New Zealand throughout the final quarter of 2016 contributed to the recently experienced significant declines in production, however conditions began to improve throughout the month of December.
When regionally weighted by milk production, rainfall reached a ten year seasonal high during November, contributing to soil moisture deficits reaching a record seasonal low.
Rainfall remained higher on a YOY basis throughout December, but declined to below ten year average figures, contributing to soil moisture deficits returning to more normal levels.
New Zealand farmgate milk prices reached a nine year low during the ’15-’16 production season as concerns over a potential El Niño event mounted while global milk supplies expanded significantly, particularly from within the EU-28. The ’16-’17 farmgate milk price forecast has been revised higher a total of three times over the past five months, however, as a gradual rebalancing of global supply and demand continues to take place. The current ’16-’17 farmgate milk price forecast of $6.00/kgMS is 53.8% above ’15-’16 price levels and 7.8% above three year average prices.
New Zealand slaughter rates accelerated throughout the final months of the ’15-’16 production season, reaching record seasonal highs. Overall, ’15-’16 annual New Zealand cow & heifer slaughter rates finished up 3.2% YOY, reaching a record annual high. New Zealand cow & heifer slaughter rates have declined by 11.1% in total over the first seven months of the ’16-’17 production season, however, as an 18.9% decline in slaughter rates has been experienced throughout the past four months. New Zealand cow & heifer slaughter rates declined by 19.1% YOY during Dec ’16, reaching a three year seasonal low.