Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Fonterra faces 'substantial' drop in milk production

Fonterra faces 'substantial' drop in milk production before seasonal peak as farmers adjust to low prices

By Tina Morrison

Oct. 16 (BusinessDesk) - Fonterra Cooperative Group's milk production has dropped heading into the seasonal peak as suppliers to New Zealand's largest commodity exporter respond to low dairy prices by winding back their output.

Fonterra's milk intake for September, when production typically ramps up ahead of the peak in mid-October, was 8.7 percent below the year-earlier month, the Auckland-based cooperative said in a statement. Its intake for the season to date, from June through September, was down 5.3 percent from a year earlier.

Farmers have cut production in response to Fonterra's lower payout forecast for the current season. Fonterra last month raised its forecast payout to $4.60 per kilogram of milk solids, from what would have been a decade-low $3.85/kgMS, in response to improved international demand and lower local production. Dairy product prices climbed in last week's GlobalDairyTrade auction for a fourth consecutive time, after nearly six months of declines.

"When Fonterra announced that the payout was going to be under $4, that caused a lot of farmers to have a really good look at their costs, they culled cattle and they reduced costs and they looked to reduce production," said OMF financial markets director Nigel Brunel. "They reduced production because you can't keep producing milk at a loss. This is the very first indication that milk production is down and it's down substantially."

Fonterra's North Island milk intake is 9.7 percent below September last year and 5.7 percent lower for the season to date, the company said. In the South Island, the company has collected 6.7 percent less milk in September and 4.3 percent less for the season to date.

Unfavourable spring growing conditions in some parts of the country had also impacted New Zealand milk production, Fonterra said.

In Australia, Fonterra has collected 1 percent more milk in September, with season-to-date volumes up 1.9 percent, it said.

Fonterra, the world's largest dairy exporter, said the rate of milk production growth from major exporting countries had eased as farmers globally respond to lower dairy prices. Solid demand growth is being seen in Asia as China returns to steady import growth while the Middle East and Africa have slowed, it said.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

TradeMe: Property Prices In Every Region Hit New High For The Very First Time

Property prices experienced their hottest month on record in December, with record highs in every region, according to the latest Trade Me Property Price Index.\ Trade Me Property spokesperson Logan Mudge said the property market ended the year with ... More>>

Motor Industry Association: 2020 New Vehicle Registrations Suffer From Covid-19

Chief Executive David Crawford says that like some other sectors of the New Zealand economy, the new vehicle sector suffered from a case of Covid-19. Confirmed figures for December 2020 show registrations of 8,383 were 25% ... More>>

CTU 2021 Work Life Survey: COVID And Bullying Hit Workplaces Hard, Huge Support For Increased Sick Leave

New data from the CTU’s annual work life survey shows a snapshot of working people’s experiences and outlook heading out of 2020 and into the new year. Concerningly 42% of respondents cite workplace bullying as an issue in their workplace - a number ... More>>

Smelter: Tiwai Deal Gives Time For Managed Transition

Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed to working on a managed transition with the local community,” Grant Robertson said. More>>

ALSO:

OECD: Area Employment Rate Rose By 1.9 Percentage Points In The Third Quarter Of 2020

OECD area employment rate rose by 1.9 percentage points in the third quarter of 2020, but remained 2.5 percentage points below its pre-pandemic level The OECD area [1] employment rate – the share of the working-age population with jobs – rose ... More>>

Economy: Strong Job Ad Performance In Quarter Four

SEEK Quarterly Employment Report data shows a positive q/q performance with a 19% national growth in jobs advertised during Q4 2020, which includes October, November and December. Comparing quarter 4, 2020, with the same quarter in 2019 shows that job ad volumes are 7% lower...More>>

NIWA: 2020 - NZ’s 7th-warmest Year On Record

The nationwide average temperature for 2020, calculated using stations in NIWA’s seven-station temperature series which began in 1909, was 13.24°C (0.63°C above the 1981–2010 annual average). New Zealand’s hottest year on record remains 2016, when... More>>

Quotable Value New Zealand: Property Market Set To Cool From Sizzling To Warm In 2021

Nostradamus himself could not have predicted the strange series of events that befell our world in 2020 – nor the wild trajectory of New Zealand’s property market, which has gone from “doom and gloom” to “boom and Zoom” in record time. Even ... More>>