Fonterra confirms record dairy season

Photo / Mark Mitchell

Diary giant Fonterra and its farmer shareholders are on track to report record production, two weeks out from the close of the 2010-2011 season.

The co-operative said this morning that favourable pasture growth conditions since January, had helped push production 4 per cent ahead of last year, when much of the country was experiencing dry or drought conditions.

Fonterra last season collected 1286 million kilograms of milksolids.

Agricultural market analyst Agrifax, earlier said dairy production could be up about 3 per cent, adding hundreds of millions of dollars to potential farmer payouts.

Fonterra is forecasting a payout for the 2010-11 season of $7.90-$8 per kilogram of milksolids before retentions.

Steve Murphy, general manager of milk supply, said the turnaround in fortunes, particularly north of Taupo followed a cold, wet spring for farmers.

"This, coupled with an early December drought, depressed production levels dramatically.

"Farmers then had to cope with more drought, floods and snowstorms. But the recent excellent pasture growth has meant herds are now in good condition, which bodes well for calving and the new season's start."

Murphy said the additional milk would be welcomed in the market where supply remained tight.

He noted prices for globally traded dairy products, while off their highs of early March, were still at historically high levels.

"This means farmers are on track to enjoy another good season, which will flow through the economy and benefit every New Zealander."

Fonterra recently reported the highest ever month for exports, with 229,000 tonnes of its dairy products leaving New Zealand shores in March.

- Susie Nordqvist