By Jenny Ruth
May 30 (BusinessDesk) - Fonterra shares and units have fallen to record lows after the dairy giant said total New Zealand milk production fell 10 percent in April from a year ago and Australian production fell 10 percent in March.
Fonterra Co-operative shares, which can be owned only by farmers, fell as low as $3.95, or 2.5 percent, before recovering to $3.98. Meanwhile, units in the Fonterra Shareholders’ Fund, which anyone can own, experienced a similar decline.
“Dry conditions continued across most of the North Island and parts of the South Island,” Fonterra said in its latest Global Dairy Update.
Fonterra’s own milk collection was down 9 percent in April, but was up 1 percent to 1.45 billion kilograms of milk solids for the period running from June 1, 2018 to the end of April this year.
The monthly decline included a 13 percent drop in April to 57 million kg in the North Island. The season-to-date collection is 1 percent ahead of last year at 862 million kg. In the South Island, the April collection was down 5 percent to 52 million kg, but there was a 3 percent increase to 592 million kg for the season to date.
In Australia, Fonterra collected 31 percent less milk in April and 19 percent less season to date.
“Fonterra’s share of monthly collection continues to reduce due to adverse on-farm and weather conditions, increasing cull cow rates, retirements in key regions, cost of inputs and milk collection losses in a highly competitive market,” the company says.
“Dairy Australia continue to forecast a milk production decline of between 7 percent and 9 percent for the season.”