New Zealand Milk Production Update – Jun ’18
Executive Summary
New Zealand milk production figures provided by Dairy Companies Association of New Zealand (DCANZ) were recently updated with values spanning through the end of the ’17-’18 production season. Highlights from the updated report include:
’17-’18 annual New Zealand milk production volumes finished 0.1% above the three year lows experienced during the previous production season. The New Zealand milk production season runs through May, while production volumes decline to seasonal lows throughout the month of June. New Zealand milk production volumes had finished lower on a YOY basis over six of the past eight months prior to the two most recent YOY gains in production volumes.
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. New Zealand farmgate milk prices rebounded to a three year high during the ’16-’17 production season as a gradual rebalancing of global supply and demand took place. Fonterra’s ’17-’18 farmgate milk price forecast was raised $6.55/kgMS to $6.75/kgMS during May ’18 as global supply and demand continues to be positive for farmers. Current Fonterra farmgate milk price forecasts are 10.3% above ’16-’17 price levels and are on pace to reach a four year high. Fonterra also announced a ’18-’19 opening farmgate milk price forecast of $7.00/kgMS, which would be a five year high.
’16-’17 annual New Zealand cow & heifer slaughter rates declined 11.7% from the record high levels experienced during the previous production season but have rebounded by 5.6% throughout the first 11 months of the ’17-’18 production season. Apr ’18 New Zealand cow & heifer slaughter rates increased 22.6% YOY when normalized for slaughter days, finishing higher on a YOY basis for the sixth time in the past seven months. Slaughter rates finished at the second highest seasonal figure on record for the month of April, trailing only 2016 levels. New Zealand slaughter is expected to remain higher on a YOY basis in coming months as Mycoplasma bovis is eradicated from approximately 150,000 cows.
- May ’18 New Zealand milk production volumes increased on a YOY basis for the second consecutive month, finishing up 6.2% to a record seasonal high for the month of May. Overall, ’17-’18 annual New Zealand milk production volumes finished 0.1% above the three year lows experienced during the previous production season.
- Fonterra’s ’17-’18 farmgate milk price forecast was raised from $6.55/kgMS to $6.75/kgMS during May ’18 as global supply and demand continues to be positive for farmers. Fonterra also announced a ’18-’19 opening farmgate milk price forecast of $7.00/kgMS, which would be a five year high.
- Apr ’18 New Zealand cow & heifer slaughter rates increased 22.6% YOY when normalized for slaughter days, finishing higher on a YOY basis for the sixth time in the past seven months. New Zealand slaughter is expected to remain higher on a YOY basis in coming months as Mycoplasma bovis is eradicated from approximately 150,000 cows.
’17-’18 annual New Zealand milk production volumes finished 0.1% above the three year lows experienced during the previous production season. The New Zealand milk production season runs through May, while production volumes decline to seasonal lows throughout the month of June. New Zealand milk production volumes had finished lower on a YOY basis over six of the past eight months prior to the two most recent YOY gains in production volumes.
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. New Zealand farmgate milk prices rebounded to a three year high during the ’16-’17 production season as a gradual rebalancing of global supply and demand took place. Fonterra’s ’17-’18 farmgate milk price forecast was raised $6.55/kgMS to $6.75/kgMS during May ’18 as global supply and demand continues to be positive for farmers. Current Fonterra farmgate milk price forecasts are 10.3% above ’16-’17 price levels and are on pace to reach a four year high. Fonterra also announced a ’18-’19 opening farmgate milk price forecast of $7.00/kgMS, which would be a five year high.
’16-’17 annual New Zealand cow & heifer slaughter rates declined 11.7% from the record high levels experienced during the previous production season but have rebounded by 5.6% throughout the first 11 months of the ’17-’18 production season. Apr ’18 New Zealand cow & heifer slaughter rates increased 22.6% YOY when normalized for slaughter days, finishing higher on a YOY basis for the sixth time in the past seven months. Slaughter rates finished at the second highest seasonal figure on record for the month of April, trailing only 2016 levels. New Zealand slaughter is expected to remain higher on a YOY basis in coming months as Mycoplasma bovis is eradicated from approximately 150,000 cows.