Widespread drought is already affecting milk production.
Fonterra’s overall production is up slightly on last season’s so far but this month North Island production is down 4.7% and South Island production is down 1.8% compared with December last year.
There have been years when lower production has been matched by low prices but so far this season the price of milk is holding up.
Prices in the globalDairy Trade auction are holding up:
The trade weighted index went up 2.4% in yesterday’s sale.
The price for anhydrous milk fat .7%, butter milk powder was down .7%, skim milk powder increased 2.5% and whole milk powder was up 2.6%.
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