Latest production forecasts from New Zealand dairy giant Fonterra suggests that milk production could decline sharply towards the end of the season, according to DairyCo.

Fonterra has forecast its 2014/15 milk production will finish 2.1% below last year.

According to DairyCo this suggests supply during April and May will drop 29% year-on-year.

It says this is a higher annual production figure than previously forecast but still appears a fairly sharp decline towards the end of the season, given that rain has improved dry pasture conditions.

However, DairyCo also says that recent better pasture growth may be too late to support milk production this close to the end of the season, with many farms said to be already drying cows off or milking less often.

It says farmers are also reported to be keeping pasture usage tight now so they can grow more for next season when milk prices are expected to be higher.

Fonterra’s milk collection in New Zealand for the 10 months to March 31 reached 1,431m kgMS, 1% higher than the same period last season. However, across New Zealand milk collection in March was 3% behind March last season.



North Island collection in March reached 80m kgMS, in line with March last season.

Fonterra says rain in March, consistent with long-term averages, provided support for milk volumes.

However, it says dry conditions remain across most dairying regions and follow-up rain is needed to hold milk production in line with last season over the coming months.

Meanwhile South Island collection in March reached 60m kgMS, 7% lower than March last season.

Soil moisture remains low across most South Island dairying regions. Scattered rain in March was not enough to ease the irrigation restrictions many farmers are still facing and extremely dry conditions continue to affect pasture growth rates.

Fonterra’s milk collection in Australia for the nine months to March 31 reached 100m kgMS, 6% higher than the same period last season.