Fonterra's NZ milk collection in season to date rises 10.4%

Fonterra Cooperative Group says its New Zealand milk collection in the first two months of the season is up 10.4 percent, although it has eased as incentives to boost winter production finish.

The company collected 29 million kilograms of milk solids in New Zealand in June and July, up from 26.2 million kg/MS in the same period last year. North Island collection rose 9.6 percent to 24.8 million kg/MS and in the South Island, it rose about 16 percent to 4.2 million kg/MS.

Fonterra said a small number of farms were flooded in the central and lower South Island after heavy rain in late July. Farmers now faced challenging conditions as they begin calving with "significantly more rain than normal for this time of year."

Australian milk collection is up about 28 percent to 8.3 million kg/MS. The company said that in July, more than 50 Australian farmers moved supply to Fonterra from other milk processors. "This combined with a milder winter than last year has resulted in a significant lift in milk volumes, although it is still early in the season," it said in its Global Dairy Update for August.

New Zealand dairy exports rose 2 percent in the 12 months to May 31. Whole and skim milk powder, which make up 54 percent of New Zealand exports, "were both flat. Fluid and fresh dairy and cheese were up 67,000 MT and 16,000 MT respectively, a combined increase of 16 percent. This was partially offset by declines in AMF (anhydrous milk fat) and casein, down a combined 11 percent," Fonterra said.

Australian exports fell 4 percent and US exports gained 14 percent. Exports from the European Union rose 2 percent in the 12 months through April and "growth continues to be driven by cheese and infant formula, up a combined 10 percent," Fonterra said.

Asia recorded a 12 percent gain in dairy imports in the 12 months ended April 30 and increases were seen across all products, Fonterra's report said. China alone recorded an 8 percent gain in imports for the 12 months through June 30 and whey powder, infant formula and cheese were up a combined 19 percent. Imports to Latin America rose 10 percent in the 12 months through April, driven by cheese and whole milk powder.

Imports to the Middle East and Africa fell 4 percent in the 12 months through April with declines in all products except skim milk power, which rose 4 percent.

Among other news in Fonterra's monthly update, it said the first mozzarella is rolling off the line at its Stanhope plant in northern Victoria, marking the first Australian production of the cheese for Fonterra since 2013. The cheese is aimed at pizza restaurants in China.

(BusinessDesk)