Fonterra mulls milk production

Fonterra has held its forecast for lower milk volumes this season while signalling production may decline further in response to lower prices.
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Auckland-based Fonterra reiterated that it expects 2015/16 milk volumes to fall between 2 and 3 percent to 1589 million kilograms of milk solids compared with year earlier levels.

However, it may revise this lower as farmers pull back production through the season, it said in a statement.

Fonterra, the world’s largest dairy exporter, last month cut its forecast farmgate milk price payout to farmers for the 2015/16 season to $3.85/kgMS after dairy prices slumped to a six-year low amid increased supply and weak demand.

The lower prices have prompted some farmers to pull back on production, with lower volumes on the GlobalDairyTrade platform underpinning price increases at the last two events.

«Farmers are responding to the lower forecast farmgate milk price by returning to more traditional farming practices,» said Fonterra group director co-operative affairs Miles Hurrell.

«They are reducing the use of feed supplements, and lowering stocking rates per hectare as they concentrate on utilising pasture.

Market data from several independent sources shows cows are being culled at higher rates than last season.

«In addition, currently our daily milk collection average is lower than for the same period last year.»

Still, it’s early in the season, and any forecast at this point is very dependent on weather conditions, which have so far been poor for production, Mr Hurrell said.

«Given these variable factors, we have decided to maintain our current forecast milk volume at this very early stage of the season,» he said.

Source: 3News
 

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