By Tina Morrison
Fonterra Cooperative Group says milk collection is down in New Zealand and Australia -- its two largest markets -- in the first 11 months of the season, during a period of weak dairy prices.
Milk collection across New Zealand fell 3.3 percent to 1.499 billion kilograms of milk solids in the season through to April 30.
The decline came exclusively in the North Island, while good weather conditions kept South Island production unchanged, Fonterra said in its Global Dairy Update.
The 2015/16 season forecast has been revised to 1.558 billion kgMS, down 3 percent on the previous season, it said.
"Lower milk collections are largely a result of the low milk price environment, with farmers reducing stock rates and supplementary feeding to reduce costs," Fonterra said.
"We are currently seeing favourable weather conditions across many dairying regions, supporting late season milk production."
In Australia's July 1-to-April 30 season-to-date, the milk collection was down 1.7 percent to 107.6 million kgMS.
Fonterra said it was a result of unfavourable pasture growth across most dairying regions, especially Victoria.
Global dairy prices have stayed lower for longer as global production amid a global oversupply and weak demand.
Fonterra said that milk production has been strong in the European Union and eased in other major exporting countries.
"It continues to be a tough season for our farmers with ongoing pressure on the Farmgate Milk Price due to the supply and demand imbalance in the global dairy market," the company said.