[31 October/NZ Farmer]

National milk flows are 5.6% ahead of last season as favourable weather conditions have helped production levels. The growth partly reflects the poor production achieved last year when the weather was either too dry or too wet. ASB Bank economist, Nathan Penny, said that ASB has increased its milk growth forecast from 2 to 4% while Fonterra has forecast an increase in collection volumes of 1.3%. Mr Penny added that the extra milk did mean downward pressure on prices and noted that ASB has trimmed their milk price forecast to $6.25 per kilo milksolids although Rabobank analyst, Emma Higgins, said that they were sticking to a forecast of $6.65 per kilo milksolids and production growth of 2%, which Ms Higgins noted was in contrast to global production levels which are slowing down following drought in the US, Europe and Australia. Westland Milk Products has also lowered its forecast range for the 2018/19 season to between $6.10 and $6.50 per kilo milksolids.