Dry weather in New Zealand: Fonterra lowers milk production forecast

December patchy rains in Northern Australia have ended, leaving good conditions for hay. Increases optimism regarding weather conditions and pastures.

New Zealand milk production increased by 1.85% in the first half of the dairy season, from June to November 2017, compared to the same period of the previous year. Fonterra expects a 3% decrease in milk production this season compared to the previous season, due to the current drought conditions, which are expected to adversely affect pasture quality.

Following the decline started in October, Butter prices the first week of 2018 are slightly increasing. There is some buyer uncertainty as to likely Butter availability due to the recent announcement by Fonterra about milk production.

The slight recovery in SMP prices at the beginning of 2018, following the year-end decrease, could mean an adjustment in the trend.

Cheddar prices in Oceania continue to weaken, because many Buyers are not currently in much need to immediately restock and the current export interest is lower. Price increases are expected soon as a result of Fonterra’s recent decision to reduce Cheddar offerings at GDT events.

In the first week of 2018 WMP prices strengthened, reversing a late 2017 string of weaker prices. The increase reflects Fonterra’s projections of lower milk production and the announcement of WMP lower availability during GDT events.
dry-weather-in-new-zealandCLAL.it – Production of cow’s milk in Oceania

– Assessments about market trend are expressed in US$;
– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team


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