NZ remains lowest-cost milk producer - report
The cost of producing milk in New Zealand continues to compare favourably with other exporting regions despite a lift in production costs over the past five years.
This is the highest average price since May 2017, she says.
“Contract periods out across the new season’s flush were in positive territory and New Zealand product is still trading at a premium to EU and US sourced whole milk powder (WMP).”
Confirmation by Fonterra that milk collections for February 2018 were lower by 4% would have helped this result.
The major drivers dragging overall results down were weaker skim milk powder (SMP) prices and a sharp decline in anhydrous milk fat pricing.
“Yet while the average SMP price dropped by -1.8% to US$1849/tonne there is price support for NZ SMP, which remains at a premium to most European sourced SMP offered.”
The northern hemisphere peak will put pressure on prices and there is a risk of higher feed prices globally. This will turn down production pressure over the close of 2018 and into 2019.
