Fonterra says it has cut its milk volume forecast for the 2014-15 season to 1,532 million kg of milksolids, reflecting the impact of dry weather on production in recent weeks.
The new forecast is 3.3 per cent lower than the 1,584 million kg collected last season. The previous milk volume forecast, made in December last year, was 1,584 million kg.
Fonterra said it could meet all current sales commitments but that it planned to reduce the quantity of product offered on the GlobalDairyTrade auction platform.
The cooperative's group director co-operative affairs, Miles Hurrell, said daily milk production was now 6.1 per cent lower than at the same time last season, as farmers appeared to be using more traditional practices to manage their farm businesses with the low payout forecast.
"In the first half of the season, excellent pasture conditions resulted in milk volumes being higher than the previous season," he said in a statement. "The situation has changed significantly over the course of this month," he said.
In some regions where pasture quality has declined markedly since mid-January, farmers were drying off cows early. There also appeared to be a reduction in feed supplements, as the economics did not support their widespread use this season, Hurrell said.
- Jamie Gray, NZME. News Service business reporter