18 Dec 2014

Fonterra milk supply forecast questioned

8:23 am on 18 December 2014

A dairy analyst thinks Fonterra may be erring on the conservative side in its latest milk supply predictions.

The milk flow so far this season has been running 4 percent ahead of last year but Fonterra said it was now expecting to collect the same amount of milk as the 2013-14 season.

AgriHQ's dairy analyst, Susan Kilsby, said that would require a sharp drop in milk production for the rest of the season.

"They base it mainly around the low milk price, meaning that farmers won't be able to afford to buy additional supplement in the latter part of the season.

"Certainly through December we're not really seeing any slowdown in the milk supply as yet. I think it's a little conservative that forecast of no growth at all, but it's very hard to forecast milk in the second half of the season."