Fonterra has advised it is expecting a 2% increase in milk supply in the 2013/14 dairy season, which commenced on 1 June. This follows a 2% fall in production in the year to May 2013, which was hampered by drought. These figures were released in Fonterra's publication "Global Dairy Update" Issue 10. This effectively means Fonterra expects milk production this season to be equal to the 1492 million kilograms milksolids (kgMS) that was produced in the year to May 2012.
The Agrifax team are a little more optimistic about milk volumes this season. A forecast of +3% to +5% was reported In the May edition of the Agrifax Dairy Report, for the 2013/14 season. The $7 milk price means additional supplementary feed should "stack up" and this will assist milk supply in the areas that will still be feeling the after effects of last season's drought.
The Fonterra report identifies that the very poor finish to the season offset the gains made during the first half of the season. "At the half year, milk collection was up 6% compared to the same period last season. This was due to excellent spring and early summer growing conditions across most of the country leading to strong growth in New Zealand dairy production. In the second half of the season milk collection was down 8.9% compared to the same period last year due to the drought which quickly deteriorated pasture conditions from March 2013 across New Zealand. Significant rainfall did not occur until mid April 2013 resulting in many of our farmers drying off herds much earlier than in previous seasons."
More normal conditions for pasture growth are anticipated this season. The recent improvement in climatic conditions has brought temperatures and pasture growth back in line with historic averages and we are anticipating that the 2013/14 season will result in more normal growing conditions compared to the large variances seen in the 2012/13 season.
"These changes have improved the volume outlook and while it is still early in the season, we are currently forecasting milk volumes to grow by 2% to 1,496 million kgMS for the 2013/14 season" says Fonterra.
Fonterra will revise its forecast on a quarterly basis based on actual milk production volumes, in line with the requirements of the Dairy Industry Resturcturng Act 2001 (DIRA).
