February 21, 2018

New Zealand Production Projected Down 1%

 |  By: Mike Opperman

Despite dry weather that impacted pasture growth in New Zealand, a USDA report says milk production and export potential are unlikely to be adversely affected. Current production is estimated to be less than one percent below 2017 levels.

Two factors are projected to impact production:

1. Fewer cows. Although the USDA report says there are 28,000 more cows during the beginning of 2018 than the same period of 2017, it's about 36,000 less than projected. Total cow numbers are projected to be at 4.9 million head, down from initial estimates of 4.95 million head. 

2. Weather. After a cold and wet spring last year, very hot temperatures and limited rainfall dominated summer. That slowed pasture growth to a point where it will impact production this spring. 

Other interesting developments, according to the report:

  • Dairy producers will be docked for having too much vegetable fat in milk. Fonterra introduced a Fat Evaluation Index test for each farm. This is the result of feeding a significant amount of palm kernal extract, which bypasses the rumen and remains as vegetable fat in the milk. This impacts further processing. The test classifies milk from grades A through D. Anything scoring a C or D will penalized. 
  • Mycoplasma bovis. This viral pathogen was detected in New Zealand dairy cows in July 2017. To date 4,800 cows have been destroyed. 

The USDA report states that the one percent reduction in production will not have an adverse affect on New Zealand dairy exports.