The full impact of the nationwide drought was felt in March as milk output fell significantly, according to the latest data from DCANZ.
Monthly milk production nationwide was down to levels last seen in 2008.
Only 1,446,000 tonnes of milk were produced in the month, 18% less than in February and 17% less than March 2012. Given the scale and severity of the drought, many may have expected an even sharper fall, but holding South Island volumes limited the damage.
Annual (12 month cumulative) production to March was 20,210,000 tonnes and 2.0% less than the record set in January. March is the second successive that the annual production fell, and the largest fall since April 2010.
April production data will be well down on the same period a year ago due to early drying-off decisions many dairy farmers took in response to the weather conditions they faced in February and March.
April is the last major production month in the current dairy season.
Despite all this, annual production is still 3.8% higher in the twelve months to March than for the same period a year ago.
Fonterra reacted by reducing the amount of product offered in their globaldairytrade actions and markets responded by sharply bidding up dairy commodity prices.
However, with offered volumes scheduled to rise, prices have started to fall back.
The next auction event is later tonight.