Dairy giant Fonterra exports record volumes in December

Friday, 22 January 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: New Zealand dairy giant Fonterra Co-operative Group said on Thursday it had exported record monthly volumes in December.

The world’s largest dairy exporter said it had shipped more than 300,000 tons of dairy products to overseas markets, around 10 percent more than its previous record month in December 2014.

But the new benchmark could be hard to beat as reduced milk volumes begin to impact production levels, said Fonterra’s Managing Director for Global Ingredients, Kelvin Wickham.

Fonterra is forecasting a year-on-year reduction of milk volumes by at least 6% this season as farmers respond to lower milk prices and after dry conditions hit parts of New Zealand.

After rising steadily since 2008 to scale record highs in 2013, global dairy prices have dropped sharply due to slowing economic growth in China and global oversupply of milk products. China is one of New Zealand’s top export markets and the world’s largest importer of whole milk powder.

Weaker dairy prices have put significant pressure on New Zealand farmers. The Central Bank now estimates around 80 percent of dairy farmers will have negative cash flow in the current season, posing a risk to the economy.