Drought forces Fonterra to end early

Drought has closed most of Fonterra’s 86 dairy processing plants around NZ this season several weeks earlier than usual reports Stuff.

The dry weather has pinched supply to 70 per cent of Fonterra’s factories – most north of Taupo – forcing them to stop processing before the usual winter shutdown for maintenance, said general manager milk supply Tim Deane.

However, the farmer-owned co-operative and NZ’s biggest company, which processes 92 per cent of the country’s raw milk, said national milk production for the 2009-10 season would still be “a fraction ahead” of last season’s collection of about 14 billion litres of milk – thanks to South Island production. Drought in the upper North Island – Northland and Waikato – had cut daily milk production for this time of the year back 45 to 55 per cent on last season, Mr Deane said.

Daily milk production in the lower North Island was 12 to 13 per cent behind last season. Production in the Nelson and Southland dairying areas was starting to lag behind last year but Canterbury milk output was booming, about 10 per cent ahead of last season. Other parts of the central South Island were still producing ahead of last year. Drought has cramped the hopes – and balance sheets – of many of Fonterra’s 10,000 shareholders in a year in which the co-operative is offering one of its biggest payouts of $6.10 a kilogram of milksolids.