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Production dip not 10 per cent: Fonterra

NZ NewswireNZ Newswire 21/07/2016 Paul McBeth

Fonterra says the decline in milk collection last month wasn't as big as previously thought because the extra day of a leap year mucked up its modelling.

The Auckland-based cooperative collected 9.9 million kilograms of milk solids in June, but revised down the year-earlier June collection to 10 million kgMS, meaning the monthly decline was only 1.4 per cent and not the 10 per cent drop it reported earlier this month.

"This error was caused by a modelling inaccuracy resulting from the change in days with 2016 being a leap year," it said.

Fonterra's North Island collection was revised to a 0.5 per cent increase to 7.6 million kgMS from a 6 per cent fall, while the South Island collection was changed to a 7.2 per cent decline to 2.3 million kgMS from a 22 per cent drop.

Dairy prices were steady at this week's GlobalDairyTrade auction with the index price at $US2336 ($NZ3352), while whole milk powder prices rose 1.9 per cent to $US2079 a tonne. An expanding global supply has kept pressure on prices which have stretched local farmers' balance sheets as they face another year of operating below the breakeven farmgate payout.

Units in the Fonterra Shareholders' Fund increased 0.2 per cent to $5.54 and have dropped 7.7 per cent so far this year.

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