Fonterra milk volumes recover but still back
Fonterra's milk flows are still down by 5 per cent even though it has collected more milk from farmers to make a slight recovery in its seasonal production.
The milk decline this season was previously at 7 per cent.
Wet and cool weather conditions through peak milking, as well as the Northland drought were factored into the revision, according to the co-operative's latest Global Dairy Update.
The update did not indicate if the lower supply would affect consumer prices.
Milk collections were down 5 per cent nationwide for the season so far from June to the end of January, reaching 1053 million kilograms of milksolids (kg MS), which was 54 million kilograms less than teh same stage last season.
In January, milk collections reached 173 million kilograms, 1 per cent behind the same month last season.
The largest decrease was in the North Island, where volumes dropped 7 per cent from June to January and in the month of January, 101 million kg MS was collected, a 3 per cent fall from the same month last year.
South Island farmers fared better with collections falling only 2 per cent from June to January and January collections reached 72 million kilograms, 1 per cent up on the same month last season.
Total milk production for December dropped 3 per cent compared with the same month last year. Milk flows fell 2 per cent for the year to December compared with the same period in 2016.
New Zealand is not alone with declining milk flows as other countries are recording less milk being produced.
Milk production among European Union dairy farmers decreased for the sixth consecutive month with November collections down 4 per cent compared with the same month last year.
In Australia, November production decreased 6 per cent and was down 7 per cent for the year to November. The decline in Australia is due to unfavorable pastoral conditions.
However, US production in December increased 2 per cent compared with the same month last year, with farmers responding to better weather and grain prices.
Exports from the United States continued to grow, up two per cent for the year to November and 27 per cent over November.
In comparison, export strength out of New Zealand was softening.
New Zealand dairy exports in November were down 5 per cent or 19,000 tonnes, compared with the same month last year because of a combined 7 per cent fall in whole and skim milk powder exports, which account for 60 per cent of monthly exports.
However, exports lifted 6 per cent for the year to November with 191,000t leaving New Zealand. Infant formula exports lifted 85 per cent, fluid and fresh dairy up 44 per cent and skim milk powder (SMP) was up 10 per cent. New Zealand's largest export whole milk powder (WMP) was down 3 per cent.
Export growth out of the EU was also softening with declining growth rates, the report said. Exports remain up by 9 per cent, or 427,000t, compared with the same period last year.
In New Zealand's all important China market, imports for the year to December lifted 20 per cent, or 389,000t, compared with the same period last year. Fluid and fresh dairy was up 40 per cent, WMP up 21 per cent and whey powder up 14 per cent. SMP is the only major dairy category to have declined, down 8 per cent.
Dairy imports decreased 2 per cent or 3000 tonnes in December compared with the same month last year as a result of fluid and fresh dairy imports back by 15 per cent, SMP fell 27 per cent, and whey powder was back by 7 per cent.
These declines were offset by the third largest import category WMP, which lifted 99 per cent.