Fonterra is expecting record production for the 2010/11 season after the best autumn weather in several years.
Production is 4% ahead of the same time last year with a couple of weeks of the season still to go. This time last year drought resulted in lower milk production.
Steve Murphy, general manager milk supply said:
Fonterra last season collected 1,286 million kilograms of milksolids.
“Exceptionally favourable pasture growth conditions since January mean our farmer shareholders have enjoyed strong production around the country, particularly north of Taupo. This is a real turnaround from earlier in the season when many of our farmers were struggling with a cold and wet spring. This, coupled with an early December drought, depressed production levels dramatically.”
“It was a tough start to the season due to the northern drought. Farmers then had to cope with more drought, floods and snowstorms. But the recent excellent pasture growth has meant herds are now in good condition, which bodes well for calving and the new season’s start.”
Mr Murphy said the additional milk would be welcomed in the market where supply remained tight.
He noted prices for globally traded dairy products, while off their highs of early March, were still at historically high levels.
“This means farmers are on track to enjoy another good season, which will flow through the economy and benefit every New Zealander.”
Farmers have been very cautious, paying off debt and containing costs in the expectation that next season’s payout will not be as high as this one’s.
But record production when international prices are well above the long term average is very good news not just for the company and its shareholders, employees and those who supply and service them but the wider economy as well.