New Zealand's milk production for the month of March has dropped by over 2% when compared to the same time last year, according to the Dairy Companies Association of New Zealand.

In total, New Zealand produced 174m kg of milk solids (MS) in March 2018, down from 178m kgMS produced in March 2017.

The drop in production can be attributed to a prolonged drought which has hampered growing conditions for most of the season and has had a major impact pasture quality.

This is the fourth consecutive month in which milk production has dropped for New Zealand when compared to the same month 12 months previously.

EU milk production forecast

Meanwhile, EU milk deliveries are expected to grow by 1.4% in 2018 with a slowdown in milk collection growth projected to take place only in 2019 mainly due to lower prices, according to the latest European Commission outlook on the dairy sector.

While milk deliveries are to grow this year by 1.4%, production is only forecast to grow by 0.5% in 2019.

The reason for the slowdown in production in 2019 is due to forecast lower milk prices

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