Fonterra says milk collection is down in both New Zealand and Australia in the first 10 months of the season, reflecting destocking in its home market in the face of low milk prices and unfavourable weather across the Tasman.
Milk collection across New Zealand fell 3 percent to 1.39 billion kilograms of milk solids in the 10 months ended March 31, with all of the decline coming in the North Island and no change in the south.
The reduction was "largely a result of the low milk price environment, where farmers are continuing to reduce stocking rates and supplementary feeding in order to reduce costs," Fonterra said in its Global Dairy Update. In Australia's July 1-to-March 31 season-to-date, the milk collection was down 1 percent to 99 million kg/MS "as a result of unfavourable pasture growth due to dry conditions across most dairying regions, especially Victoria."
Fonterra said looking across its markets globally, the milk production growth rate had stabilised in the European Union and eased in other major exporting countries. Dairy exports remained strong for New Zealand, Australia, and Europe while the US was down, largely because of increased domestic demand.
China, Asia and Latin America "continue to see strong growth in dairy imports, while the Middle East and Africa imports ease," it said.
Units of the Fonterra Shareholders' Fund rose 0.2 percent to $5.86 and have declined 2.3 percent this year.