Low price impact on milk production slight

Milk production eased only slightly in 2015-16, despite the lowest milk prices in at least 20 seasons, figures released by DairyNZ and LIC show.

Production was down 1.5% nationally, despite 52 fewer herds and 20,522 fewer cows than in 2014-15.

South Island production increased 2%, with rises in both Marlborough-Canterbury (2%) and Otago-Southland (2%).

The South Island now produced 42.7% of national milksolids production, compared with only 31.1% a decade ago, DairyNZ senior economist Matthew Newman said.

In total, dairy companies processed 20.9 billion litres of milk containing 1.86 billion kg of milksolids in 2015-16, which compared to 21.2 billion litres and 1.89 billion kg ms the previous season.

On average, each cow produced 373kg ms last season, very near the 2014-15 record of 377kg ms and still above the 2013-14 production of 371kg ms.

Overall, herd numbers fell for the first time since 2007-08, now totalling 11,918. North Island herd numbers dropped 122 to 8696 while South Island herds increased 70 herds to 3222.

In Otago, there were 438 herds, made up of 262,293 cows, with a herd average of 599. The region produced 5.4% of New Zealand's milksolids.

The number of cows milked nationally declined 0.4% to just under five million, despite a very high number of culled cows during the past two seasons.

That reflected a high number of replacement heifers entering the milking herd in 2015-16, plus some carry over cows being culled. A further decline in the number of cows milked was expected this season, Mr Newman said.

Prices were expected to lift at this week's GlobalDairyTrade auction as poor spring growing conditions - very wet weather in the North Island - continued to weigh on production.

An ASB report yesterday said current futures pricing suggested a whole milk powder price rise in the 5% to 7% range.

The North Canterbury earthquakes also had the potential to temporarily disrupt supply in the upper half of the South Island and the lower North Island.

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