Fonterra says milk production up 4pc

Fonterra says milk production was up 3pc in December, but dry conditions in the South Island are likely to lead to a tapering off.

Fonterra's milk production was running 4 per cent higher in the seven months to December 31, compared with the same period in the previous year, but is starting to taper off due to dry conditions in the South Island, the cooperative said.

For the month of December, production was 3 per cent higher than the same month in 2013, Fonterra said in its latest market update.

North Island collection in December reached 125 million kg of milk solids, 4 per cent higher than December last season, as rain in many dairy regions supported grass growth.

South Island collection in December reached 76 million kg, one per cent higher than December last season.

Growing conditions had improved in Southland after a cold start to the season, Fonterra said.

"However, dry conditions are impacting pasture growth across the east coast of the South Island and farmers will be watching this closely as irrigation restrictions may be put in place," it said.

Milk collection in Australia for the six months to December reached 71m kg, 6 per cent higher than the same period last season.

However, milk collection across Australia in December reached 12.5m kg - 3 per cent lower than December last season.

Following a strong start to the season, production slowed as dry conditions affected pasture growth across most of south east Australia.

Supplementary feeding has increased due to low pasture availability and irrigation in Tasmania has started earlier than last year, Fonterra said.

See the full Fonterra update here: