New Zealand annual milk output up 9.8 percent

New Zealand farmers have increased milk production nearly 10 percent in the year ended June as they restocked after a drought in the previous season, according to a government survey.

The average dairy farm produced about 137,000 kg of milk solids in the year, said the Ministry of Agriculture and Fisheries in an annual survey.

Farmers are budgeting on a three percent production increase in the current year despite the cold weather, weak prices and a lack of funds for supplementary feed, the report said.

A collapse in dairy prices to five-year lows has prompted farmer protests in Europe in the past two months and caused US cooperatives to plan their second cow cull in three months to help restore incomes. New Zealand farmer morale is low and spending is cut so as to limit a second year of losses, said the report.

The ministry said farm working expenditure is budgeted to drop 11 percent, with major budget drops expected in feed, fertiliser and repairs and maintenance expenses.

Average farm sales dropped 27 percent on-year as a production increase failed to offset lower milk prices, the report said. Rising fertiliser and feed costs also incurred a NZ$58,500 (US$38,285) average farm cash loss for the year.