New Zealand's Dairy Industry in 2023

New Zealand continues to be a powerhouse in the global dairy sector, boasting a herd of approximately 5.1 million dairy cattle. These cattle produce around 21.4 billion liters of milk annually, supported by a robust processing infrastructure that can handle about 20 billion liters per year.

Dairy Production and Export

Cheese production in New Zealand is projected to reach 375,000 tons by 2024. The nation produces 1.5 million tons each of milk powder and whey annually, accounting for 35% of global milk powder exports, which amounts to 4.6 million metric tons. In 2023, dairy exports were valued at approximately NZ$18.2 billion, with 95% of products reaching international markets, primarily in Asia and the Middle East. However, exports to the United States encounter a 10% tariff.

Key Enterprises and Market Dynamics

The industry is spearheaded by key players like Fonterra, Synlait Milk, Westland Milk Products, Yili, Bright Dairy, and Pure Nutrition. Recent market activities include Westland Milk Products acquiring a 60% stake in Pure Nutrition for NZ$31.1 million and Fonterra investing NZ$150 million in a new UHT cream plant.

Economic Impact and Farmgate Prices

The dairy sector is a significant contributor to New Zealand's economy, with this season's milk price expected to contribute approximately NZ$15 billion. The Farmgate Milk Price remains stable at NZ$10.00 per kgMS. In Taranaki, the GDP per capita is the third highest in the country, with dairy exports surpassing earnings from oil and gas.

Challenges and Opportunities

Challenges such as inflation-driven cost increases, downturns in the butter business, and potential labor issues due to expiring visas persist. Despite these, New Zealand maintains a competitive edge with premium butter prices and returns exceeding production costs. The government is investing over NZ$400 million in methane mitigation tools, aiming for 11 commercially available options by 2030.

Environmental and Technological Innovations

Environmental issues like nitrate and E. coli contamination are being addressed with innovations in food safety and plant protein production. New Zealand aims to double its dairy export value by 2034, focusing on diversification and sustainability. Nestlé is financing the country’s first commercially viable Net Zero dairy farm, aiming for significant emissions reductions.

Labor and Employment

The dairy sector contributes over 7% to New Zealand's GDP and employs approximately 41,000 people. Due to labor shortages, the sector relies heavily on international workers. Fonterra's cooperative, owned by about 10,500 farmers, controls nearly a third of global dairy trade.

Strategic Developments and Investments

Fonterra plans to invest up to NZ$1 billion to enhance efficiency, including a NZ$75 million investment to expand butter production. The country is negotiating a free trade agreement with India to improve dairy market access and skilled professional movement.

Animal Wellbeing and Sustainability

The New Zealand dairy industry prioritizes animal wellbeing, utilizing wearable technology to enhance cow wellbeing metrics. The Competitive Farm Systems – Frontier Farms project underscores this focus as crucial for future competitiveness. Fonterra's cooperative structure is based in New Zealand, with its Australian operations separating from the New Zealand-based model.

Impact of 24-Month Calving Intervals on New Zealand Dairy Farms

The study explores the effects of a 24-month calving interval on dairy cows, aiming to reduce labor peaks and increase profitability. The trial is conducted at DairyNZ’s Scott Farm in Hamilton and expanded to include commercial farms.

Location of Waiū Dairy and Context of Māori-owned Dairy Processors

The financial distress at Waiū Dairy occurs amid broader challenges facing independent Māori-owned dairy processors in New Zealand, competing against larger multinational corporations.

Modified: 2025/12/10