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New Zealand Dairy Industry in 2023

New Zealand stands at the forefront of the global dairy industry, renowned for its high-quality dairy exports and robust production capabilities. As of 2023, the industry is navigating economic challenges and environmental concerns while enhancing its global market stature.

Production and Processing Metrics

New Zealand hosts approximately 5.1 million dairy cattle, contributing significantly to its annual milk production of around 21.4 billion liters. The sophisticated processing infrastructure across the country ensures efficient handling of nearly 20 billion liters annually, maintaining top-tier global quality standards.

Cheese production is expected to reach 375,000 tons by 2024, while milk powder production remains a cornerstone of the sector with an estimated output of 1.5 million tons each 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

In 2023, the dairy exports from New Zealand reached approximately NZ$18.2 billion, underscoring the nation’s role as a leading global dairy exporter. The domestic market sees negligible dairy imports, reinforcing New Zealand's self-sufficiency in dairy production.

Significant Industry Events

• Economic factors, including inflation, have increased operational costs for dairy farmers.
• Synlait Milk is experiencing financial difficulties due to limited backing from Bright Dairy.
• Rising local demand for anhydrous milk fat and butter is influencing market dynamics and pricing.
• Westland Milk Products acquired a 60% stake in Pure Nutrition for NZ$31.1 million.
• Fonterra's $150 million investment in a new UHT cream plant in Southland is underway.
• The introduction of New Zealand's first green hydrogen dual-fuel milk collection tanker by Miraka.
• Record-high farmgate prices were reported by Fonterra, with favorable conditions allowing an updated milk payout forecast.
• Milk collections rose by 5.2% due to favorable weather conditions affecting supply.
• The historic forecast for milk price stands at NZ$10 per kilogram of milk solids.

Outlook and Challenges

New Zealand is advancing towards sustainability within its dairy sector, marked by Fonterra's $64 million allocation for emission reductions. Partnerships, such as those with the UAE, are pivotal in fortifying New Zealand's international market presence amidst climate challenges and global trade complexities. Despite these hurdles, favorable payouts and market settings signal continued industry growth.

Fluctuations in global dairy prices, a vulnerable New Zealand dollar, and evolving weather patterns, inclusive of drought scenarios, prompt critical forecasts. Fonterra responded with a 25% upward adjustment to its payout forecast.

Investor confidence is rising, indicated by market trends favoring companies like Bremworth, a2 Milk, and Synlait. There's also interest in goat's milk due to its potential digestive benefits compared to cow’s milk, suggesting market diversification opportunities.

The government's 'Science for Farmers' initiative is designed to boost sustainability and productivity within the agriculture sector.

Recent Developments

The dairy sector in New Zealand witnessed substantial production increases, with January 2023 figures surpassing projections. Moreover, Pāmu, the state-owned enterprise, announced a notable half-year net profit of $62 million. Noteworthy is Fonterra’s NZD 10/kgMS mid-point milk price forecast, amidst dropping interest rates.

Greenpeace Aotearoa's allegations against Fonterra regarding palm kernel use have stirred environmental discourse, impacting relations with companies like Nestlé.

Currency valuation shifts provided other dairy regions, including New Zealand, with export advantages, enhancing competitive positions globally.

Modified: 2025/03/09