Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
The co-op’s milk collection across New Zealand for the seven months to December 31 reached 914 million kgMS, up 4% on the same period last season.
New Zealand collections in December were 185 million kgMS, 5% up on the same month last season.
Fonterra says the mix of fine weather and rain in December saw soil moisture and pasture levels recover across most of the country.
Overall good animal health and favourable weather resulted in milk volumes ahead of last season, which was a three-year low where weather conditions and other factors had an adverse impact.
Fonterra’s North Island milk collection in December was 109 million kgMS, 7% higher than December last season. Milk production in Central Districts and Waikato continues to track above last season due to good spring and on-farm conditions, it says.
North Island milk collection for the 2018/19 season to date reached 567 million kgMS, up 4%.
South Island milk collection in December was 76 million kgMS, 2% higher than December last season. Warm and dry weather in December has improved pasture growth in Otago/ Southland where flooding had occurred during November.
“Favourable conditions are expected to continue, with grass growth looking secure throughout early summer. Good grass growth and pasture cover in Canterbury.,” the co-op says.
South Island milk collection for the 2018/19 season to date reached 347 million kgMS, up 5%.
However, Fonterra milk collection in Australia has taken a hit, down 14% over the six months ending December 31.
High input costs and poor seasonal conditions continue, resulting in increased cow cull rates, decreasing the season’s milk production. As national volumes decline, the milk supply market continues to be highly competitive, the co-op says.
