Dairy company Fonterra’s (ASX:FSF) Australian milk production decreased 8.4 per cent in July compared to the same period last year. Production for the 12 months to July was also down 8.4 per cent on the previous 12 months. Dairy Australia is forecasting 2019/20 season production to decline by 3 per cent to 5 per cent.
US milk production went the other way, increasing slightly by 0.2 per cent in August.
Fonterra says growth in the US continues to be limited by record low cow numbers as poor on-farm profitability is leading to an increase in culling.
Australia dairy exports fell by 1.9 per cent, or 1,140 MT, in July compared to the same period last year. The decline was driven by Skim Milk Powder, whey, whole milk powder and cheese, down which was largely offset by an increase in fluid milk products
China dairy import volumes increased 14 per cent, or 32,847 MT, in July compared to the same period last year. This was driven mainly by increases in fluid milk products and smaller increases in skim milk powder, infant formula but partially offset by decreases in butter and whey, which deceased.
Shares in Fonterra (ASX:FSF) closed 1.59 per cent higher at $3.20 on Friday.