New Zealand Dairy Industry Overview in 2023

New Zealand's dairy industry is a vital component of its economy, celebrated for its premium-quality products and commitment to sustainable agricultural practices. The sector is characterized by innovation and strategic international partnerships, ensuring its robust presence in the global market.

Production and Processing Metrics

New Zealand hosts approximately 5.1 million dairy cattle, leading to an impressive annual milk production volume of about 21.4 billion liters. The nation's processing capacity is significant, with around 20 billion liters of milk processed annually. Cheese production is projected to reach 375,000 tons by 2024, while milk powder and whey production stand at an estimated 1.5 million tons each year.

Key Enterprises in the Dairy Market

The New Zealand dairy sector features leading enterprises such as Fonterra, Synlait Milk, Westland Milk Products, Yili, Bright Dairy, and Pure Nutrition. The industry benefits from a diverse range of contributors, including numerous privately-owned farms, Fonterra-affiliated farms, and the Organic Dairy Hub (ODH).

Exports and Imports

In 2023, New Zealand's dairy exports were valued at approximately NZ$18.2 billion, underscoring its substantial role in the global market. The country is largely self-sufficient, with minimal imports and a 10% export tariff applied to the U.S.

Significant Industry Events

Economic factors such as inflation have driven up operational costs, impacting companies like Synlait Milk and reducing support from Bright Dairy. Westland Milk Products acquired a 60% stake in Pure Nutrition for NZ$31.1 million, and Fonterra announced a planned investment of $150 million in a new UHT cream plant in Southland. Miraka introduced the country's first green hydrogen dual-fuel milk collection tanker.

Fonterra increased its milk payout forecast due to record-high farmgate prices and favorable weather, with a 5.2% increase in milk collections. Strategic alliances, especially with the UAE, enhance New Zealand's position in global trade. However, Greenpeace Aotearoa raised concerns about Fonterra's use of palm kernel feed. Additionally, there is a growing interest in goat's milk, offering new diversification opportunities.

Global Trade and Relations

New Zealand actively promotes free trade through the WTO and is seeking to expand trade with India via FTAs. There is a noticeable increase in cheese imports from China, and Fonterra has adjusted farmgate milk prices to align with autumn demand. The dairy market is recovering post-COVID-19, despite rising on-farm expenses.

Innovation and Technology

New Zealand's Halter company offers virtual fencing technology, boasting pulses that are "100 times weaker" than traditional electric fences. This innovation provides additional benefits, such as continuous monitoring of animals' location, health, and fertility status.

Conclusion

New Zealand's dairy industry remains a leader on the global stage, demonstrating strong export performance, innovative methods, and strategic international collaborations. Its focus on sustainability and quality continues to drive success in the global market. The current season's milk price injects approximately NZ$15 billion into the economy. The stable Farmgate Milk Price of NZ$10.00 per kgMS for the 2024/25 and 2025/26 seasons significantly benefits regional communities in New Zealand. Additionally, Greenpeace Aotearoa has filed a lawsuit against Fonterra for allegedly misleading environmental claims regarding its '100% New Zealand grass-fed' butter.

New Zealand is insisting on terms of a free trade agreement with Thailand, as Thailand backs out of dairy sector obligations. New Zealand's dairy trade with Thailand was valued at about $450 million in 2024. Fonterra boasts over 100 organic suppliers, primarily in New Zealand's North Island, with a supply growth rate of 2-3% annually.

The country is home to Synlait, a prominent dairy company. Synlait, based in New Zealand, has announced its opening forecast base milk price for the 2025-2026 season, aligning with industry standards and reflecting a positive market outlook.

New Zealand businesses are concerned about the impact of United States tariff policies. Most New Zealand businesses surveyed believe United States tariff policies will have a much greater impact on them than COVID-19 or the Global Financial Crisis.

Modified: 2025/05/18