New Zealand Milk Production and Dairy Manufacturing Report May 2013
Report Highlights:
End of the golden weather: drought reduces pasture production in 2013 causing milk production to be reduced by 7% to 19.2 million metric tons. Dairy product exports only likely to be effected by 2%.WMP will continue to be produced in increasing volumes.
Executive Summary
The golden run New Zealand dairy farmers enjoyed over the eighteen months from mid 2011 to the end of 2012 came to an end early in 2013. Now the milk supply for 2013 is forecast at 19.2 million metric tons (MT) close to 7% below the boom year of 2012 which saw production soar to 20.6 million MT. Over the period from the end of 2010 to the end of 2012, thanks to increased cow numbers and consistently high pasture production, the milk supply leapt up 19%. However drought conditions over the whole of the North Island and parts of the South Island from January 2013 through to April 2013 have dealt a severe blow to milk production in the first half of the year. The aftereffects of the drought, lower conditioned cows and less pasture supplies will hamper production in the second half of the year as well.
The lower milk supply in 2013 will result in lower dairy product production overall. However Whole Milk Powder production (WMP), the most efficient commodity for NZ to produce, will continue to increase. New production capacity coming on-line during 2013 should mean production will reach
close to 1.3 million MT just ahead of 2012. Skim Milk Powder may well be the only other main commodity to remain at a similar production level in 2013, at 400,000 MT. Fat production is likely to be down from 527,000 MT in 2012 to 494,000 MT in 2013. Cheese production which is the
most expensive of the main commodities to produce is likely to drop some 15% to a revised forecast of 270,000 MT in 2013.
Exports are not likely to be reduced as much as the drop in milk supply would suggest because the buildup of inventory during 2012 will be reduced in 2013. It is now forecast total export volume will be 2.75 million MT in 2013, a 2% drop from 2012. Only WMP and SMP exports are forecast to
be above 2012 levels, at 1.3 million MT and 405,000 MT respectively.
