New Zealand's Dairy Industry in 2023

New Zealand continues to be a cornerstone of the global dairy market, recognized for producing high-quality dairy products while maintaining sustainable agricultural practices. The industry's innovative approaches and strong international partnerships have solidified its standing worldwide.

Production and Processing

In 2023, New Zealand is home to approximately 5.1 million dairy cattle, contributing to an impressive annual milk production volume of around 21.4 billion liters. The country's processing capacity is robust, with about 20 billion liters of milk processed annually. Cheese production is on track to reach 375,000 tons by 2024, while milk powder and whey production are estimated at 1.5 million tons each year.

Key Enterprises

The New Zealand dairy market is led by prominent companies such as Fonterra, Synlait Milk, Westland Milk Products, Yili, Bright Dairy, and Pure Nutrition. These companies are bolstered by privately-owned and Fonterra-affiliated farms, as well as the Organic Dairy Hub (ODH).

Export and Import Dynamics

In 2023, New Zealand's dairy exports were valued at approximately NZ$18.2 billion, highlighting its significant role in the global market. The country relies minimally on imports and maintains a 10% export tariff on the U.S. market. New Zealand exports approximately 95% of its dairy products, positioning it as a price-taker on the world stage.

Significant Industry Events

Recent industry developments include inflation-driven operational cost increases impacting companies like Synlait Milk and reduced support from Bright Dairy. Westland Milk Products' acquisition of a 60% stake in Pure Nutrition for NZ$31.1 million and Fonterra's planned investment of $150 million in a new UHT cream plant in Southland are noteworthy. Miraka introduced New Zealand's first green hydrogen dual-fuel milk collection tanker.

Additionally, Fonterra adjusted its milk payout forecast upward due to record-high farmgate prices and favorable weather, resulting in a 5.2% increase in milk collections. Innovations include Halter's virtual fencing technology and advancements in reproductive efficiency, such as a 5% increase in the 6-week in-calf rate among anoestrus dairy cows.

Conclusion

New Zealand's dairy industry remains a global leader, showcasing strong export performance, innovative practices, and strategic international collaborations. The current season's milk price contributes approximately NZ$15 billion to the economy, with a stable Farmgate Milk Price of NZ$10.00 per kgMS benefiting regional communities. Despite rising input costs and global volatility, exports have grown by 5% through April, adding US$1.5 billion in value due to a weak dollar and strong demand.

Challenges persist, such as Fonterra's downturn in its butter business and a potential labor crisis from expiring migrant worker visas. Nonetheless, New Zealand's competitive edge ensures dairy returns exceed production costs. High butter prices are advantageous for the nation's dairy industry and economy due to strong export demand, allowing companies to secure premium prices and boost the national economy.

New Zealand secures better access to the Canadian dairy market following a longstanding trade dispute resolved under the CPTPP agreement. Despite a legal victory for New Zealand, Canada persisted in its non-compliance, driven by political support for its domestic dairy industry. The breakthrough now promises up to $157 million in annual export value for New Zealand.

Showing signs of recovery in dairy production, New Zealand is showing signs of recovery in dairy production, which is important for the global market.

Modified: 2025/08/11