Fonterra reports strong milk production growth for season to date

NEW ZEALAND – Fonterra has reported a robust increase in milk production for the current season, marking a significant growth of nearly 5% compared to the same period last year.

According to its November Global Dairy Update, Fonterra’s peak spring production in October rose by 2.5% compared to October 2023, demonstrating a continued upward trend in its output.

The co-operative collected approximately 205 million kilograms of milk solids (kg MS) in October alone, which translates to an average daily collection exceeding 80 million litres.

However, Fonterra has yet to disclose the specific volume collected on its peak day in late October.

Based on an advance payment rate of NZ$7.20 per kg MS, Fonterra distributed an estimated NZ$1.5 billion to its farmers for October’s production.

As reported by Fonterra, the total season-to-date milk collection has reached 512.2 million kg MS, equating to around NZ$3.7 billion in farmgate payouts.

Industry-wide data from the Dairy Companies Association of New Zealand (DCANZ), published by NZX Dairy Insights, indicates that national milk production in October totaled 261.5 million kg MS.

Fonterra accounted for 78.5% of this figure, underscoring its dominant role in New Zealand’s dairy sector. Season-to-date, the country’s total milk output has reached 654 million kg MS, reflecting consistent national growth.

This upward trend includes a 2.8% production increase in October, following more substantial gains of 5% in September and between 9% to 10% in July and August.

Fonterra’s growth is attributed largely to favorable weather conditions, particularly in New Zealand’s North Island, which experienced a 5.9% rise in milk production.

This contrasts with the South Island, where production increased by 2.6%. Growth in the southern region has been notably slow in Southland, highlighting regional variations in production performance.

Internationally, Fonterra Australia also reported positive results, with milk production up by 1.4% in September and showing a 3.4% increase over the 12 months ending September.

In contrast, milk output in Europe and the United States has remained relatively flat over the past year. This static production reveals potential challenges within global supply chains, particularly as demand dynamics shift in international markets.

Overall, Fonterra’s strong performance reflects broader positive trends within the global dairy market, driven by steady gains in both domestic and regional production.

However, the stagnant production levels observed in Europe and the U.S. may signal challenges ahead for international supply dynamics, highlighting the need for resilience in global dairy operations.