Fonterra, New Zealand Taking Some Punches

December 18, 2015 02:19 PM

By Lucas Sjostrom

Often the darlings of and mentors to the international dairy industry, New Zealand and Fonterra, the country’s biggest cooperative, are suddenly making the news for unspectacular reasons.

Maybe the biggest bellwether of New Zealand’s situation is the drop in its national herd size. While not always a predictor of milk production, the 4% shrink in New Zealand’s herd is the first occurrence in a decade, and expected to stay that way in 2016.

Statistics New Zealand released the news Tuesday, showing the first drop since 2005, sending prices at the GlobalDairyTrade auction up nearly 2%. New Zealand’s herd was down 300,000 head in June, with a 3% and 4% drop in year-over-year milk in October and November, respectively. Fonterra has forecast 6% lower milk production overall in the June 2015-May 2016 milk production year.


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