Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
Milk production for the 12 months to January is down 2% on the same period the previous year.
It says for the remainder of the New Zealand production season production will continue to be influenced by changes in farming systems, such as decreased stocking rates and supplementary feeding, as farmers respond to the low milk price environment.
Australian production in December decreased 4% on the same month the previous year. Production for the 12 months to December was up 1% on the same period the previous year. However, the rate of growth continues to slow as pasture growth conditions have deteriorated due to dry weather in many dairying regions.
NZ exports increased 6% in December compared to the same month the previous year, with increases seen in most major dairy categories, excluding WMP and SMP. Exports for the 12 months to December increased 4% on the same period the previous year. An increase of around 117,000 tonnes for the 12 months was largely driven by cheese up 18%, SMP up 7% and AMF up 5%, but partially offset by butter down 5% and WMP down 3%.
Australian exports increased 1% in December on the same month in the previous year. Significant increases in cheese, up 26%, and fluid and fresh dairy, up 6%, were almost fully offset by WMP, whey powder and SMP, whichwere all down.
Exports for the 12 months to December remain strong, up 7% on the same period in the previous year. This is largely due to SMP being up 23%, cheese up 14%, and fluid and fresh dairy up 9%.
