Aug ’20 New Zealand milk production volumes reached a record high seasonal level for the fourth consecutive month, finishing up 5.3% on a YOY basis.
Fonterra’s ’20-’21 farmgate milk price forecast of $5.90-$6.90/kgMS was unchanged from the previous month, remaining below the six year high level experienced throughout the previous production season.
New Zealand cow & heifer slaughter rates increased 14.0% on a YOY basis during Jul ’20 when normalizing for slaughter days, reaching a 34 year high seasonal level.
Additional Report Details Milk Production According to Dairy Companies Association of New Zealand (DCANZ), Aug ’20 New Zealand milk production volumes finished 5.3% higher on a YOY basis, reaching a record high seasonal level for the month of August. On a milk-solids basis, production increased 4.7% YOY, also reaching a record high seasonal level.
The Aug ’20 YOY increase in New Zealand milk production volumes was the fourth experienced in a row and the largest experienced throughout the past 14 months a on percentage basis. New Zealand milk production volumes have reached record high seasonal levels over each of the past four months. ’19-’20 annual milk production volumes declined 0.7% on a YOY basis however production on a milk-solids basis increased 0.3% YOY throughout the period. Drought conditions impacted the milk supply throughout the ’19-’20 production season. ‘20-’21 YTD New Zealand milk production volumes have rebounded by 4.7% on a YOY basis throughout the first quarter of the production season.
Farmgate Milk Prices Fonterra finalized their ’19-’20 farmgate milk price at a value of $7.14/kgMS, reaching a six year high level. Fonterra’s ’20-’21 farmgate milk price forecast was unchanged from the previous month through Sep ’20, remaining at a range of $5.90-$6.90/kgMS. Fonterra’s ’20-’21 farmgate milk price forecast range remains historically wide as significant uncertainties remain surrounding the impact of COVID-19 on global demand.
Cow & Heifer Slaughter New Zealand cow & heifer slaughter rates increased 14.0% on a YOY basis during Jul ’20 when normalizing for slaughter days, reaching a 34 year high seasonal level. The YOY increase in New Zealand cow & heifer slaughter rates was the second experienced in a row. Jul ’20 dairy cow & heifer slaughter, which has more limited historical data available, also increased on a YOY basis for the second consecutive month, finishing up 7.0%. ’19-’20 annual New Zealand cow & heifer slaughter rates rebounded 2.7% from the previous year, reaching a four year high level. ’20-’21 YTD New Zealand cow & heifer slaughter rates have increased by an additional 9.6% on a YOY basis throughout the first two months of the production season.
New Zealand milk production volumes increased at a compound annual growth rate of 4.2% over the ten year period ending during the ’14-’15 record production season but have trended flat-to-lower over the four most recent production seasons as farmgate milk prices declined from the ’13-’14 record high levels and the New Zealand milk cow herd was reduced. USDA is projecting the New Zealand milk cow herd will decline slightly on a YOY basis throughout 2020 but remain above the six year low level experienced throughout 2017.
