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 collected 60 million kgMS in the South Island; soil moisture remains low across most South Island dairying regions.
“Scattered rain in March was not enough to ease the irrigation restrictions many farmers are still facing and extremely dry conditions continue to affect pasture growth rates,” the co-op says in its monthly global dairy update.
North Island collection in March reached 80 million kgMS, in line with March last season.
Fonterra says rain in March, consistent with long-term averages, supported for milk volumes. However, dry conditions remain across most dairying regions and follow-up rain is needed to hold milk production in line with last season over the coming months.
In Australia, milk collection for the nine months to March 31 reached 100 million kgMS, 6% higher than the same period last season.
Milk collection in March reached 9mkgMS, 9% ahead of March last season. Most dairying regions, Tasmania in particular, received some rain, favouring pasture growth. Western Victoria produced much more than last season and Tasmania is tracking in line with last season.
Meanwhile milk production worldwide has been subdued, Fonterra says.
EU production in January was in line with the same month last year, the first month since June 2013 with no growth in milk production. Ireland had the largest decrease, down 14%. Only the UK and Poland grew production in January.
US production in January increased 2% over January 2014. This increase was below market expectations and affected by reduced production in the major dairy states California, New Mexico, Texas, Washington, Oregon and Idaho. Argentina and Uruguay production data for January is not complete. Production in December decreased 1% over the same month last year.
Australian production in January increased 1% over January 2014. Production decreased in Victoria but increased 7% in Tasmania.
Meanwhile, New Zealand exports in January increased 3% over January 2014.
This was driven by SMP and AMF increasing 25% and cheese increasing 21%. But WMP decreased 10% to 137,000 tonnes.
Australian exports in January decreased 3% over January 2014. Increases in most major dairy categories including SMP, fluid and fresh dairy, cheese and whey powder were offset by a large decrease in WMP, down 62%.
EU exports in December increased 8%; US exports in January decreased 22% over January 2014.
