Fonterra's milk production in Australia fell by 13.7 per cent in April from a year earlier, due to rising input costs and continued farm exits in key regions.
Fonterra's Australian milk production in April was down nearly 14 per cent from a year ago with higher input costs and farm exits in key dairy regions continuing to hurt local output.
The NZ-based dairy exporter said its Australian milk production for the 12 months to April was down 6.1 per cent on the prior 12 months as farmers struggled for confidence amid poor seasonal conditions and rising costs.
Reduced supplemental feeding, increased cow cull rates, and farm exits also contributed to the Australian production cut, Fonterra said in its latest monthly output update on Wednesday.
In contrast, May milk production in New Zealand was flat compared to a year ago, while output over 12 months lifted 2.2 per cent thanks to improved weather conditions.
Fonterra said Australian dairy exports increased 5.6 per cent in April compared to a year ago, primarily driven by infant formula, whey powder, fluid milk products and cheese, with exports up by 3.9 per cent over the 12-month period.
The company said Dairy Australia continues to forecast a milk production decline of between 7.0 per cent and 9.0 per cent for the 2018/19 season.
Severe drought and low farmgate prices have hurt dairy farmers across Australia's south-east over the past couple of years, with many farmers forced to cull their herd to manage costs, or exit the industry.
Fonterra last month cut its earnings outlook and announced it was closing its Dennington facility in south-west Victoria as dry weather and mounting expenses continued to undermine its operation.
The company's ASX-listed shares were worth $3.71 before trade on Wednesday, having fallen 39 per cent since a more than five-year high in January 2018.