New Zealand Milk Production Update – May ’18
Executive Summary
New Zealand milk production figures provided by Dairy Companies Association of New Zealand (DCANZ) were recently updated with values spanning through Apr ’18. Highlights from the updated report include:
’17-’18 YTD New Zealand milk production has rebounded to near flat levels with the four year lows experienced during the previous year, down just 0.1% throughout the first 11 months of the production season. The New Zealand milk production season runs through May, while production volumes decline to seasonal lows throughout the month of June. Prior to Apr ’18, New Zealand milk production volumes had finished lower on a YOY basis over six of the past eight months.
New Zealand farmgate milk prices reached a nine year low during the ’15-’16 production season as concerns over a potential El Niño event mounted while global milk supplies expanded significantly, particularly from within the EU-28. New Zealand farmgate milk prices rebounded to a three year high during the ’16-’17 production season as a gradual rebalancing of global supply and demand took place. Fonterra’s ’17-’18 farmgate milk price forecast was reduced from $6.75/kgMS to $6.40/kgMS during Dec ’17 on concerns over excess global milk production and high global powder stocks however Fonterra raised the ’17-’18 price forecast up to $6.55/kgMS in Apr ’18, noting strong global dairy demand. Current Fonterra farmgate milk price forecasts are 7.0% above ’16-’17 price levels and are on pace to reach a four year high.
’16-’17 annual New Zealand cow & heifer slaughter rates declined 11.7% from the record high levels experienced during the previous production season but have rebounded by 2.3% throughout the first ten months of the ’17-’18 production season. Mar ’18 New Zealand cow & heifer slaughter rates increased 7.2% YOY when normalized for slaughter days, finishing higher on a YOY basis for the fifth time in the past six months. USDA projects the New Zealand dairy cow herd will increase slightly throughout the 2018 calendar year, increasing 0.5% from the six year low experienced during 2017.
- Apr ’18 New Zealand milk production volumes increased on a YOY basis for the first time in the past five months, finishing up 2.9% to a record seasonal high for the month of April.
- Fonterra’s ’17-’18 farmgate milk price forecast was raised from $6.40/kgMS to $6.55/kgMS during Apr ’18 on strong global dairy demand. Current farmgate milk prices are 7.0% above ’16-’17 price levels and are on pace to reach a four year high.
- Mar ’18 New Zealand cow & heifer slaughter rates increased 7.2% YOY when normalized for slaughter days, finishing higher on a YOY basis for the fifth time in the past six months.
’17-’18 YTD New Zealand milk production has rebounded to near flat levels with the four year lows experienced during the previous year, down just 0.1% throughout the first 11 months of the production season. The New Zealand milk production season runs through May, while production volumes decline to seasonal lows throughout the month of June. Prior to Apr ’18, New Zealand milk production volumes had finished lower on a YOY basis over six of the past eight months.
New Zealand farmgate milk prices reached a nine year low during the ’15-’16 production season as concerns over a potential El Niño event mounted while global milk supplies expanded significantly, particularly from within the EU-28. New Zealand farmgate milk prices rebounded to a three year high during the ’16-’17 production season as a gradual rebalancing of global supply and demand took place. Fonterra’s ’17-’18 farmgate milk price forecast was reduced from $6.75/kgMS to $6.40/kgMS during Dec ’17 on concerns over excess global milk production and high global powder stocks however Fonterra raised the ’17-’18 price forecast up to $6.55/kgMS in Apr ’18, noting strong global dairy demand. Current Fonterra farmgate milk price forecasts are 7.0% above ’16-’17 price levels and are on pace to reach a four year high.
’16-’17 annual New Zealand cow & heifer slaughter rates declined 11.7% from the record high levels experienced during the previous production season but have rebounded by 2.3% throughout the first ten months of the ’17-’18 production season. Mar ’18 New Zealand cow & heifer slaughter rates increased 7.2% YOY when normalized for slaughter days, finishing higher on a YOY basis for the fifth time in the past six months. USDA projects the New Zealand dairy cow herd will increase slightly throughout the 2018 calendar year, increasing 0.5% from the six year low experienced during 2017.