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New Zealand Milk Production Update – Sep ’20

  • September 21, 2020
  • by Belinda Przybylski
Executive Summary New Zealand milk production figures provided by Dairy Companies Association of New Zealand (DCANZ) were recently updated with values spanning through Aug ’20. Highlights from the updated report include:
  • Aug ’20 New Zealand milk production volumes reached a record high seasonal level for the fourth consecutive month, finishing up 5.3% on a YOY basis.
  • Fonterra’s ’20-’21 farmgate milk price forecast of $5.90-$6.90/kgMS was unchanged from the previous month, remaining below the six year high level experienced throughout the previous production season.
  • New Zealand cow & heifer slaughter rates increased 14.0% on a YOY basis during Jul ’20 when normalizing for slaughter days, reaching a 34 year high seasonal level.
Additional Report Details Milk Production According to Dairy Companies Association of New Zealand (DCANZ), Aug ’20 New Zealand milk production volumes finished 5.3% higher on a YOY basis, reaching a record high seasonal level for the month of August. On a milk-solids basis, production increased 4.7% YOY, also reaching a record high seasonal level. The Aug ’20 YOY increase in New Zealand milk production volumes was the fourth experienced in a row and the largest experienced throughout the past 14 months a on percentage basis. New Zealand milk production volumes have reached record high seasonal levels over each of the past four months. ’19-’20 annual milk production volumes declined 0.7% on a YOY basis however production on a milk-solids basis increased 0.3% YOY throughout the period. Drought conditions impacted the milk supply throughout the ’19-’20 production season. ‘20-’21 YTD New Zealand milk production volumes have rebounded by 4.7% on a YOY basis throughout the first quarter of the production season. Farmgate Milk Prices Fonterra finalized their ’19-’20 farmgate milk price at a value of $7.14/kgMS, reaching a six year high level. Fonterra’s ’20-’21 farmgate milk price forecast was unchanged from the previous month through Sep ’20, remaining at a range of $5.90-$6.90/kgMS. Fonterra’s ’20-’21 farmgate milk price forecast range remains historically wide as significant uncertainties remain surrounding the impact of COVID-19 on global demand. Cow & Heifer Slaughter New Zealand cow & heifer slaughter rates increased 14.0% on a YOY basis during Jul ’20 when normalizing for slaughter days, reaching a 34 year high seasonal level. The YOY increase in New Zealand cow & heifer slaughter rates was the second experienced in a row. Jul ’20 dairy cow & heifer slaughter, which has more limited historical data available, also increased on a YOY basis for the second consecutive month, finishing up 7.0%. ’19-’20 annual New Zealand cow & heifer slaughter rates rebounded 2.7% from the previous year, reaching a four year high level. ’20-’21 YTD New Zealand cow & heifer slaughter rates have increased by an additional 9.6% on a YOY basis throughout the first two months of the production season. New Zealand milk production volumes increased at a compound annual growth rate of 4.2% over the ten year period ending during the ’14-’15 record production season but have trended flat-to-lower over the four most recent production seasons as farmgate milk prices declined from the ’13-’14 record high levels and the New Zealand milk cow herd was reduced. USDA is projecting the New Zealand milk cow herd will decline slightly on a YOY basis throughout 2020 but remain above the six year low level experienced throughout 2017.
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