October 30, 2019 / 10:19 PM / 20 days ago

UPDATE 1-Fonterra reports higher milk solids production in September

* NZ milk output helped by good temperatures and pasture quality

* Australia milk collection down on poor weather, intense competition

* China demand for infant formula, skim milk power in Aug strong (Updates throughout with more detail from production report)

Oct 31 (Reuters) - New Zealand’s Fonterra on Thursday reported a 0.7% rise in milk solids production in September, due to favourable temperatures and pasture conditions across much of the country.

Liquid milk production fell 0.7% for the same period, a difference Fonterra said indicates improved pasture quality from September last year. Milk solids are the amount of fat and protein contained in the liquid milk supplied to Fonterra.

The world’s largest dairy exporter said its domestic milk collection for September was 179.1 million kilograms of milk solids (kgMS), down 0.1% on the same month last season.

Fonterra’s Australia collection fell 15.2% to 10.7 million kgMS, due to high farm input costs, poor seasonal conditions, reduced herd numbers and “intense competition” for milk. Australia dairy producers are struggling amid three years of prolonged drought conditions.

Chinese dairy import volumes increased 4.7% in August amid strong demand for infant formula and skim milk powder, Fonterra said.

China makes up most of Fonterra’s market, as buyers in the mainland prefer internationally made whole milk powder and infant formula, over their local counterparts. (Reporting by Rashmi Ashok in Bengaluru; Editing by Chris Reese and Jane Wardell.)

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