Agricultural monitor and analyst AgriHQ is predicting a further increase in milk production this season, despite the low prices farmers are getting and the financial pressures they are under.
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The Ministry for Primary Industries has forecast a 1.3 percent fall in milk supply this season.
But AgriHQ expected the supply to grow by about another 2.5 percent.
Dairy analyst Susan Kilsby said farmers would be looking to compensate for low farmgate milk prices by producing as much milk as they could at the lowest cost.
She said New Zealand farmers were getting really good at managing pastures and knowing how and when to use supplementary feeds to get the greatest return in milk production .
And with the challenges facing them this season, they will be focusing their spending solely on putting more milk in the vat.
Milk production has grown by an average of 5.5 percent a year over the past five years.