FONTERRA Australia has suffered its smallest July milk intake in at least seven years.
The company said its milk collection for the first month of the 2019-20 season was 5.4 million kilograms of milk solids, a decline of 28.9 per cent from last season.
The previous July low Fonterra has experienced in the past seven years was in 2016, when six million kg MS was received.
In its latest Global Dairy Update report, Fonterra said milk intake “continues to decline, impacted by intense competition for milk supply and the continued impact of the poor conditions on-farm”.
“The drought in 2019 has led to an increase in cow cull rates, a significant number of farm retirements and a continuation of historically high input costs resulting in a material reduction to the Australian milk pool in FY19 (the 2018-19 financial year) versus FY18,” the company said.
Dairy Australia last week finalised national milk production for 2018-19 at 8.8 billion litres, a decline of 5.7 per cent from the 9.3 billion litres recorded the previous season.
The 8.8 billion litre production figure was up on Dairy Australia’s previous estimate of 8.45-8.65 billion litres.
Dairy Australia senior industry analyst John Droppert said milk production forecasts were based on data provided voluntarily by Australian processing companies.
“Data collection over the past year was made more difficult by the significant decrease in production in some regions, unprecedented turnover in supply contracts between different processing companies and some new entrants in the processing market,” Mr Droppert said.
Dairy Australia anticipates a further drop in national milk production of between 3 per cent and 5 per cent to 8.3-8.5 billion litres during 2019-20, due to continued high input costs and the reduced size of the national herd.
The national herd has fallen from 1.56 million cows in 2017-18 to about 1.45 million cows at the end of last season.
