September nationwide (i.e. for all processors), production fell 1.3pc compared to September 2016. This fall was the second month in a row, which monthly production has fallen on an annual basis, ASB bank reports.
It says that moreover, on a season-to-date basis, production is now effectively level with last season.
Indeed, the weak production numbers come at the start of the spring flush – the time of the season where production is highest. September is usually the fourth-highest month for milk production, while the current month, October, is the usually the highest.
With this weakness anticipated earlier in the month, it cut its milk production growth forecast to 3pc, from 4pc previously. However, it warned that even this lower forecast may prove optimistic as production needs to rebound strongly over the remaining eight months of the season.
It also said it was surprised at soft dairy prices over recent weeks, while other analysts have pointed to production strength in the EU and US. However, with New Zealand still the leading dairy exporter and production weak at part of the season where it should be strongest, it said it would be surprised if prices stayed soft for long.
