27 October 2016
Fonterra has today released the latest GDT Forecast Volume for the upcoming events and 12 months.
HighGround’s contacts on the ground in the Waikato region in particular have spoken about the difficulties on farm, some quoting production being -10 to -17% on last year’s volumes. While the past few days have provided some respite and sunshine assisting pasture growth, the NIWAclimate charts still paint a picture of surplus moisture and large month to date rainfall. Anecdotal comments are that cow condition has also sufferred as a result of the inclement weather, further impacting production.
Fonterra’s statement regarding the GDT volume forecast changes confirm the impact on production this month:
“The changes come in response to lower production across New Zealand and particularly the continuing impact of materially wetter than normal spring weather in most parts of the country.
Fonterra’s daily milk volumes across the central and upper North Island were down significantly in the early part of October and this has continued through October, particularly in the key dairying region of Waikato where daily milk volumes are now down around 14 per cent in late October (vs. the same time in the 2015/16 season).
These reductions in daily milk volumes are highly unusual and Fonterra is continually assessing the on-going impact on its contract book and future production plans given that milk collections at the peak of this season will not recover and will flow into the balance of the season.
As a result, the Co-operative’s forecast offer volumes over the next 12 months for New Zealand products has been decreased by 11,199 metric tonnes, with a 10,199 metric tonne decrease occurring in Whole Milk Powder and a 1,000 metric tonne decrease occurring in AMF.
Including this latest decrease, Fonterra has reduced GDT offer volumes since 1 August 2016 by 55,481 metric tonnes. These decreases have been made based on Fonterra’s forecast milk volume for the 2016/17 season which was reduced further today from 1,523 million kilograms of milksolids (kgMS) to 1,460 million kgMS.”
HighGround will publish detailed analysis and commentary later today once we have reviewed all of the data.