Weather impacts on New Zealand milk production

Margaret Donnelly

Margaret Donnelly

As dairy production levels increased across the US and Australia in recent months, unfavourable weather conditions impacted New Zealand production and Fonterra has cut its milk collection forecast.

In September, Fonterra New Zealand milk collection was 2pc behind September last season, although Fonterra Australia collection increased 23pc on September last year.

It comes as total New Zealand milk production in August was down 2pc compared to the same month last year.

Fonterra also reported that EU and US dairy exports worldwide are up for the 12 months to July, 4pc and 14pc respectively, with EU exports driven by Skim Milk Powder sales.

It is also predicting strong import growth from China, with imports over the 12 months to August up 9pc, driven in particular by demand for infant formula. New Zealand dairy-based exports remained static for the 12 months to July, with Total New Zealand dairy exports in July increased 8pc or 23,000 MT compared to the same month last year.

The largest increases were seen in WMP and cheese exports, up 11,000 MT and 6,000 MT respectively compared to July last year.

Exports for the 12 months to July were flat on the previous comparable period.

Meanwhile, French dairy giant Danone reported this week that its increase in sales was driven by infant formula exports to China. Reported sales at French food company Danone increased 16.6pc year-on-year to €6.4bn in the three months to September 30.

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The strong performance reflected accelerating growth in infant formula sales in China, as well as progress in Danone’s strategic priorities, such as the expansion of tailored nutrition products, which grew at a mid-teen percentage in the three month period.

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