NZ dairy production hits record in peak October month

NZ dairy production is shaping up to be a record this season. Photo / Supplied

Favourable growing conditions over spring helped drive New Zealand milk production to a record high of 271,080,000 kg of milksolids in the peak month of October, according to DCANZ data.

The previous record was 270,839,000 kg in October 2014, the data shows.

October year-on-year milk production was up 6.5 per cent on a milksolids basis while season to-date NZ milk production rose by 6 per cent, DCANZ said.

ASB senior rural economist Nathan Penny said the season was shaping up to be strongest on record, over and above the previous record set in the 2014/15 season, and following on from three successive seasons of declining production.

"Given the momentum and given the milk that is already in the tank, it's looking increasingly likely that we will set a new record," he said.

Penny said continued strong production was likely to put a dampener on tonight's GlobalDairyTrade auction, the results of which are due out early on Wednesday.

ASB was likely to raise its own production forecast and drop its farmgate milk price forecast of $6.25/kg as a result of today's data, Penny said.

Fonterra's current farmgate milk price is in a $6.25 to $6.50 range, ahead of DairyNZ's estimate of break-even of $5.40 to $5.50 kg.

Whole milk powder prices, which have the greatest bearing on the milk price, have fallen by to US2655/tonne at the last sale early this month from US$3311/tonne in April.

October is the peak month for dairy production. Milk production remains strong in the November, December and January months.