The New Zealand-based firm’s June global dairy update reported that milk production in Australia was down by 3 per cent in April compared to the same month a year earlier.
Production in Australia for the 12 months to April was down by 1 per cent.
“Production has been impacted by dry conditions across many dairying regions, especially Victoria, and the low milk price environment,” Fonterra said.
Milk production in New Zealand for the 12 months to April also fell by 1 per cent.
But production in the European Union for the 12 months to March rose by 4 per cent, despite local milk prices continuing to decrease and being below the same period last year.
Fonterra said that, despite the lower production in Australia, Australian dairy exports rose by 2 per cent in March compared to a year earlier, driven by a 21 per cent lift in the export of fluid and fresh dairy products.
Fluid and fresh dairy products comprise skim milk, whole milk and cream; and evaporated milk, sweetened condensed milk, and yoghurt.
Australian dairy exports for the year to March rose by 6 per cent, with cheese up by 13 per cent, skim milk powder up 12 per cent, and fluid and fresh dairy up 11 per cent.
Fonterra said China’s imports of dairy products increased by 18 per cent for the 12 months to April.
Its imports of fluid and fresh dairy products were up 60 per cent, and infant formula was up 48 per cent.
Fonterra’s own collection of milk in Australia totalled 7.7 million kilos of milk solids in May – 18 per cent lower than the previous May.
It said production had been heavily impacted by the reduction in Australian milk prices to align with global dairy prices.
Fonterra and Australian milk giant Murray Goulburn both slashed the prices they were willing to pay Australian farmers for raw milk last month, prompting a backlash from consumers against cheap supermarket milk.
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