Milk production in Otago-Southland is up 4% for the season to
the end of February, compared with the previous corresponding
period, and up 6% nationally.
Production across the country was ''looking great'' for most
areas, with Bay of Plenty up 9% on the drought-reduced
performance of 2012-13, while Canterbury was up 7% on last
However, some of that extra milk was because more cows were
being milked, DairyNZ chief executive Tim Mackle said.
Last week, Fonterra bumped up its forecast farm-gate milk
price to a record $8.65 per kg of milk solids, meaning a
forecast cash payout to farmers of $8.75 for the 2013-14
The increase would give a much-needed boost to confidence in
rural communities, particularly for areas experiencing
drought-like conditions, Dr Mackle said.
The extremely dry conditions were patchy, Waikato, the west
coast of Northland, Gisborne, Wanganui-Rangitikei, Wairarapa,
Marlborough, Hurunui, South Canterbury and Central Otago
being worst affected, he said.
Dry conditions were particularly severe in parts of Waikato -
home to New Zealand's greatest concentration of dairy herds -
where pastures had browned off, pasture covers were very low
and farmers were having to buy additional supplementary feed
to be able to continue milking.
''But generally the story is still one of a bumper season
with production for the entire country across all milk
companies up 6% on last year.
''All we need now is some rain in those dry areas to make it
a truly record season for most of our dairy regions,'' he
In BNZ's latest rural report, the bank's economists said
Fonterra's milk price forecast might nudge higher yet.
They expected global dairy prices to trend lower over the
coming 12 to 24 months as global milk supply responded to the
previous persistent price strength and European production
quotas were removed.
That could well see the payout back below $7 within two
The ANZ commodity price index posted a third successive
increase last month, rising 0.9%.
Cheese and butter prices led the increases, lifting 7% and 6%
The increase in cheese prices pushed the series to a six-year
high, butter prices reaching a two-and-a-half-year high.