April 17, 2013

New Zealand has witnessed its first decline in milk production since 2010, a development which has caused world dairy prices to rise, said dairy industry officials.

The top dairy-exporting country has produced 1.76 million tonnes of milk in February, a drop of 5.9% on year, said industry group, DCanz.

The decline, the first on-year drop in output since December 2010, fulfilled projections by dairy groups such as Fonterra.

New Zealand output has been adversely affected by a drought, said to be the most severe in 30 years. The drought had sent milk prices, at Fonterra's GlobalDairyTrade auctions, to their highest since the 1990s.

However, the data came as storms landed up to five inches of rain on parts of the country, with Auckland receiving more than two inches by April 16.

The band of rain is expected to continue on parts of the drought-hit North Island, possibly until April 18.

Official forecasts stated that New Zealand's rainfall for the April-to-June period was "likely to be in the near-normal range", with temperatures "likely to be above-average across the country".