November 17, 2005

USDA: New Zealand dairy and products annual 2005
 

New Zealand's milk production during the 2005/06 season (June-May) is forecast at 14.1 million tons, a 2 percent decline from the previous season. This is the second season of low milk production in a row and is well below that of 2003/04. The decline is due to poor weather conditions, resulting in decreased production per cow. This is despite a small increase in cow numbers.

New Zealand's peak milk flow normally occurs in late October. This season it has instead occurred mid-October. This is despite early season predictions that it would occur later in the season due to an extended calving period.

Fonterra purchased NZ$ 754 million (U.S.$ 524 million) of assets from New Zealand Dairy Foods, in return selling the company NZ$ 416 million (U.S.$ 289 million) of its assets, in August 2005. The brands Fonterra purchased include Anchor, which is one of Fonterra's key international brands outside New Zealand, but was owned domestically by Dairy Foods. 

A large number of dairy cows were exported live in 2004. Of the 65,000 exported, nearly 60,000 animals went to China.  Live animal sales to China weakened dramatically in 2005. 

For the year to August, only 7,000 animals have been exported to China, while 24,000 have gone to Mexico. Declining sales to China may represent a tightening of Chinese import regulations and poor 'after-sales service' by some New Zealand vendors. Analysts anticipate some animal shortages in New Zealand and domestic prices are now close to those that can be obtained by live export sales.   

For the full USDA report, click here.