Milk Production in New Zealand
According to the Dairy Companies Association of New Zealand (DCANZ), New Zealand milk production volumes in July 2020 ended up being 4.4% higher on a YOY basis. July volumes reached a record high seasonal level for the third consecutive month.
Besides such increase, milk-solids production raised as well, in comparison to July 2019. By contrast, milk supply was affected by droughts experienced earlier this year with Northern Island which remains the most afflicted area. As volumes stay near seasonal lows throughout the ’19-’20 production season, it is apparent that the COVID-19 outbreak has not impacted volumes directly. It is expected that throughout the second half of 2020, the pandemic might derange export supply chains.
Due to a strengthening New Zealand dollar relative to the U.S. dollar, set over the past two months, Fonterra’s farmgate milk prices being reduced to $7.15/kgM in comparison to $7.20/kgMS; previously set midpoint. Farmgate milk prices foreseen for 2019-2020 remains stable and expected to reach a six-year high level.
Cow & Heifer Slaughter New Zealand reached a 34-year high seasonal level. Such YOY increase is the second in a row as ’19-’20 annual New Zealand cow & heifer slaughter turnover rebounded by 2.7%. As it is predicted by USDA, New Zealand milk cow herd will slightly drop on a YOY basis, throughout the rest of the year, but such a change will not be the lowest it has ever been, as the lowest level experienced came to be during 2017.