New Zealand's Dairy Industry in 2023

New Zealand is globally recognized for its exceptional dairy products, which are a cornerstone of the nation's economy and a symbol of its sustainable agricultural practices. The New Zealand dairy sector continues to thrive by leveraging modern technologies and forging strategic international alliances.

Production and Processing Metrics

Dairy Cattle: Approximately 5.1 million

Annual Milk Production: Around 21.4 billion liters

Milk Processing Volume: Approximately 20 billion liters per year

Cheese Production Volume: Projected to reach 375,000 tons by 2024

Milk Powder and Whey Production Volume: Estimated at 1.5 million tons per year

Key Enterprises in the Dairy Market

Dairy Plants

• Fonterra
• Synlait Milk
• Westland Milk Products
• Yili
• Bright Dairy
• Pure Nutrition

Dairy Farms

• Organic Dairy Hub (ODH)
• Various privately-owned farms
• Fonterra-affiliated farms

Exports and Imports

New Zealand's dairy exports in 2023 were valued at approximately NZ$18.2 billion. The industry maintains a high level of self-sufficiency, with imports being minimal and export tariffs to the U.S. at 10%.

Significant Industry Events

Economic Factors

Inflation has influenced increased operational costs, affecting Synlait Milk and leading to reduced support from Bright Dairy.

Acquisitions and Investments

• Westland Milk Products acquired a 60% stake in Pure Nutrition, worth NZ$31.1 million.
• Fonterra plans to invest $150 million in constructing a new UHT cream plant in Southland.
• Miraka initiated New Zealand's first green hydrogen dual-fuel milk collection tanker.

Market Dynamics and Outlook

Fonterra has revised its milk payout forecast upwards due to record-high farmgate prices and favorable weather conditions boosting milk collections by 5.2%. Strategic alliances, particularly with the UAE, bolster New Zealand's global trade position. Additionally, Pāmu reported a mid-year profit of $62 million in early 2023.

Environmental issues, such as Fonterra's use of palm kernel feed, have sparked concerns from Greenpeace Aotearoa. There is also a rising interest in goat's milk, presenting new diversification opportunities. Despite a decline in anhydrous milk fat prices, butter prices have increased, leading to an 8% net profit rise for Fonterra, totaling $729 million for the year's first half.

Global Trade and Relations

New Zealand advocates free trade through the WTO and aims to expand its trade with India via FTAs. There's a growing trend of increasing cheese imports from China and adjusting farmgate milk prices by Fonterra for autumn demands. Dairy market recovery post-COVID-19 is evident, despite escalating on-farm expenses.

Over 500 farmers participated in Fonterra's April Fixed Milk Price (FMP) offering, securing $9.60 per kg of milk solids for the 2026 production. Trade Minister Todd McClay remains cautious about potential legal actions against the US over tariffs, emphasizing dialogue and data collection.

Collaborations such as the Maui Milk-Mengniu partnership aim to cater to China's growing demand for sheep milk. The School Milk Programme is expected to enhance New Zealand's export potential in this sector.

New Zealand's pivotal role in the global dairy market is underscored by Fonterra's management of the Global Dairy Trade platform achieving record highs. New Zealand's interests in Saudi Arabia’s food security goals and market speculation surrounding the sale of the Mainland Group also indicate dynamic market conditions.

Modified: 2025/05/18