Aug ’14 New Zealand Milk Production Up 4.5% YOY…
According to Dairy Companies Association of New Zealand (DCANZ), Aug ’14 New Zealand milk production continued the recent trend of production growth, increasing 4.5% YOY. The YOY monthly gain was the 13th in a row, but the lowest in nine months. Aug ’14 production remained 15.4% higher than the three year average August production and 24.6% higher than the five year average August production. The Aug ’14 figure was the most meaningful production data point since the Apr ’14 production figure, as New Zealand milk production reaches its seasonal low throughout our summer months.
New Zealand milk production gains are expected to moderate in future months, particularly on a YOY basis. Recent monthly YOY gains were historically strong partially due to adverse weather conditions reducing production throughout the spring and summer of 2013. YOY milk production gains began to pick up in August of last year which will reduce future ’14-’15 monthly YOY gains, all other factors being equal. In addition, Fonterra revised its forecast Farmgate Milk Price for the ’14-’15 season in September from $6.00/kgMS to $5.30/kgMS, noting increased volatility in international dairy commodity prices and further downside price risk. Lower Farmgate Milk Prices are expected to temper future production gains.
According to the Fonterra October Global Dairy Update, milk collections across New Zealand were up 4.5% YOY in Sep ’14, in line with the Aug ’14 4.5% YOY gain. North Island collections were up 3.1% YOY in Sep ’14 as the North Island has started the season with favorable pasture growth, despite some unsettled weather. Sep ’14 South Island collections were up 5.6% YOY as favorable soil moisture conditions continued to be experienced, although temperatures were cooler than average in most dairy producing regions.
New Zealand milk production is highly seasonal with nearly 75% of total milk produced in the six month period ranging from Sep – Feb. New Zealand milk production typically peaks in October before declining seasonally until our summer months. Fonterra will release October collection figures in late November with official DCANZ data becoming available in mid to late December.
New Zealand milk production gains are expected to moderate in future months, particularly on a YOY basis. Recent monthly YOY gains were historically strong partially due to adverse weather conditions reducing production throughout the spring and summer of 2013. YOY milk production gains began to pick up in August of last year which will reduce future ’14-’15 monthly YOY gains, all other factors being equal. In addition, Fonterra revised its forecast Farmgate Milk Price for the ’14-’15 season in September from $6.00/kgMS to $5.30/kgMS, noting increased volatility in international dairy commodity prices and further downside price risk. Lower Farmgate Milk Prices are expected to temper future production gains.
According to the Fonterra October Global Dairy Update, milk collections across New Zealand were up 4.5% YOY in Sep ’14, in line with the Aug ’14 4.5% YOY gain. North Island collections were up 3.1% YOY in Sep ’14 as the North Island has started the season with favorable pasture growth, despite some unsettled weather. Sep ’14 South Island collections were up 5.6% YOY as favorable soil moisture conditions continued to be experienced, although temperatures were cooler than average in most dairy producing regions.
New Zealand milk production is highly seasonal with nearly 75% of total milk produced in the six month period ranging from Sep – Feb. New Zealand milk production typically peaks in October before declining seasonally until our summer months. Fonterra will release October collection figures in late November with official DCANZ data becoming available in mid to late December.