Milk production in New Zealand will rise in 2017-18 for the first time in three years, to judge by Fonterra projections, although volumes will remain below record highs, amid some lingering financial worries in the industry.

Fonterra, which processes the great majority of New Zealand’s milk output, in its first forecast for collections in 2017-18, which started this month, pegged them at 1.575bn kilogrammes of milk solids.

That would represent an increase of 3.2% year on year, and end a downturn in output which kicked in as tumbling milk prices deterred producers, cutting milk values below the cost of production, and landing many farmers with substantial debts.

Fonterra’s milk price to farmers dropped from NZ$8.40 per kilogramme of milk solids in 2013-14 to NZ$3.90 per kilogramme of milk solids two seasons later.

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