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Thursday, December 14, 2017
 New Zealand Annual Milk Production Increases 9.8%, Survey Shows  

By Gavin Evans

New Zealand farmers, the world’s largest dairy exporters, increased milk production almost 10 percent in the year ended June as they re-stocked after a drought the previous season, according to a government survey.
 
The average dairy farm produced about 137,000 kilograms of milk solids in the period, 9.8 percent more than a year earlier, the nation’s Ministry of Agriculture and Fisheries said in an annual survey today. Farmers are budgeting on a 3 percent production increase in the current year despite cold weather, weak prices and a lack of funds for supplementary feed, the report said.
 
A collapse in dairy prices to five-year lows has prompted farmer protests in Europe in the past two months and caused U.S. cooperatives to plan their second cow cull in three months to help restore incomes. New Zealand farmer morale is “subdued” and spending is being cut to limit a second year of losses, today’s report showed.
 
Farm working expenditure is “budgeted to drop by 11 percent,” the ministry said. “Major decreases are budgeted for feed, fertilizer and repairs and maintenance expenses.”
 
New Zealand accounts for about 40 percent of the global trade in butter, cheese and milk powder. Those exports contribute about 20 percent of the nation’s export earnings.
 
Average farm sales dropped 27 percent from a year earlier as a production increase wasn’t enough to offset lower milk prices, the report said. Rising fertilizer and feed costs meant the average farm incurred a NZ$58,500 ($38,285) cash loss for the year.
 
Reduced spending and lower interest costs will help reduce losses to NZ$15,500 this year, assuming Fonterra Cooperative Group Ltd. doesn’t further reduce its payouts to farmers, the ministry said.
 
Fonterra, the world’s largest dairy exporter, sells about 95 percent of New Zealand’s milk. The company cut its forecast for the price it pays farmers for milk solids by 12 percent to NZ$4.55 a kilogram in May, citing weak global prices and the rising New Zealand dollar. It paid NZ$5.20 last season and a record NZ$7.90 a year earlier.
 
Source: Bloomberg News, NZ
 
 

Posted on Wednesday, July 22, 2009 (Archive on Wednesday, July 29, 2009)
Posted by bsutton@adpi.org  Contributed by bsutton@adpi.org
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