By Alexandria Winning-Browne, NZX dairy analyst
The end of 2022 means we have a full calendar years’ worth of milk production for New Zealand, even though this measure is somewhat irrelevant for the seasonal nature of NZ milk, this data point is key in gauging how NZ milk production is tracking overall.
For the full 2022-year, milk production, in a kilograms of milksolids (kg MS) basis was 3.5% lower than the year prior, and 3.8% lower on a tonnage basis. This 3.5% equates to 66,181,000kg MS, or that 3.8% equates to 835,000 tonnes of production. It is clear that milk production in NZ remains under pressure.
This full-year production figure comes after the December production figure printed positively, at 0.6% higher than the year prior, with this 0.6% equating to 1,209,000kg MS more for the month. With the weather conditions through November rapidly shifting from a wet, cold and dreary spring to a warmer and wetter start to summer, there was little doubt that December’s production figures would easily challenge the season’s prior figure. However, a 0.6% gain is impressive, when taking into account how poorly the season started, the reported lower cow numbers on-farm in NZ, along with the ongoing negative pressure reported on farms from farmers.
Although farmers in most regions were reporting positive milk production figures throughout the month, and some catching up on last year’s total production figure, there were also reports that ground and growing conditions were still difficult. Maize crops were hampered by a wet start to the season, with most Waikato maize growers signalling that they expect to have yield impacts this growing season. Likewise, ongoing wet conditions for Waikato farmers made operations a little tough, with pastures moving between excess soil moistures to slight deficits, bundled with a lack of sunlight.
January has been a continuation of December, with ongoing rain throughout the Waikato and the rest of the North Island. Take Northland for example, where conditions are significantly better than normal, with rainfall 400% higher in January than the year prior; no drought for Northland so far this year. Drought, however, is on the radar for Southland. This trend in Southland is somewhat following last year’s playbook, where Southland tended dry and put pasture production under pressure.
The summary is that the North Island is wetter than normal, while the South Island is drier than normal, and milk production is expected to run better than normal in the north and be under pressure in Southland as a result. Canterbury as a generalisation is dry, but milk production doesn’t seem to be under pressure at the time of writing.
Using December’s milk production data to update our model, the expectation for January also remains positive, as mentioned above. The model is expecting January’s production to be around 1.3% higher than the year prior, at circa 201 million kg MS for the month. The full year forecast for the midpoint sits at -1.3%, but as mentioned before, I expect this to be overestimating the tail end of the season, and I still expect the season to finish up lower than this point; between -1.3% and -2.85% on the season prior. Considering the season to date, production is already 2.1% below the same period last year at the end of December 2022, this range is easily achievable.
Our model also expects February’s milk production to be significantly higher than last year, attributable to both a weak comparable record last year, and the very favourable growing conditions across the bulk of NZ’s dairy regions. Modelled at an increase of +0.1% and +7.2%, and I would be tending towards at least a +5.0% mark at least.
