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New Zealand Dairy Industry Overview (2023)

New Zealand's dairy sector is a pillar of the national economy, providing high-quality products and maintaining a strong global presence through exports. Despite facing challenges and market shifts, the industry remains robust in 2023.

Production and Processing Metrics

Number of Dairy Cattle: 5.1 million

Milk Production Volume: 21.4 billion liters per year

Milk Processing Volume: 20 billion liters per year

Cheese Production Volume (Forecasted 2024): 375,000 tons per year

Milk Powder Production: 1.5 million tons per year

Whey Production Volume: Data unavailable

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, New Zealand exported dairy products valued at approximately NZ$18.2 billion. Import data remains unavailable, possibly due to unreported small-scale imports.

Significant Events in the Dairy Industry

Rising costs faced by farmers due to inflationary pressures.
Financial uncertainties confronted by Synlait Milk with restricted contributions from Bright Dairy.
Increased local demand for anhydrous milk fat and butter has boosted milk prices at farms.
Westland Milk Products acquired a 60% stake in Pure Nutrition for NZ$31.1 million.
Concerns over Fonterra's expansion in Japan following the removal of decarbonization incentives.
Fonterra's $150 million investment in a new UHT cream plant in Southland.
Introduction of New Zealand's first green hydrogen dual-fuel milk collection tanker by Miraka.
Rising electricity prices affecting export competitiveness.
Trade negotiations under the CPTPP regarding Canada's dairy TRQ system.
Focus on high-value products like cheese for domestic and international markets.
Fonterra reports a 5.2% increase in milk collections attributed to favorable weather.
New Zealand is the largest global importer of palm kernel, over 1.7 million tonnes in 2023.
Rabobank New Zealand has reduced rural loan interest rates by 0.5%.
Forecasts suggest Fonterra's highest milk collections in four years for the current season.
Record-high farmgate prices in New Zealand.
Dual import exemption on milk from Australia and New Zealand into Indonesia.
Continued supply to China despite declining exports.
Greenpeace endorses the Green Party's initiatives on climate pollution from dairy.
Optimism surrounds Fonterra's record forecast milk payout amid rural economic challenges.

Outlook

Fonterra's record milk price forecast of NZ$10 per kilogram of milk solids is expected to benefit farmers financially. The investment of $64 million to transition from coal-fired boilers to wood pellet fuel at its Clandeboye site is aimed at a 9% emissions reduction. Average dairy payouts have increased, but potential disruptions in exports remain a concern.

Despite challenges, New Zealand's dairy farmers anticipate gains from projected payouts and reduced interest costs. The PAUS Programme, a collaboration between Coolcare and Fonterra, is transforming milk refrigeration on farms, promoting energy savings and emission reductions. New Zealand remains a key global exporter, maintaining its competitive edge despite modest scale compared to peers. New Zealand's strategic trade agreements, such as the recently signed UAE free trade agreement, continue to bolster its international market position. The country's proactive adaptation to consumer and environmental demands ensures it remains at the forefront of global dairy trade.

New Zealand Dairy Exports Set to Bounce Back Amid Global Challenges. New Zealand's Food Safety Minister, Andrew Hoggard, has announced plans to fast-track the development of a national standard for infant formula. The Power of Big Farming on New Zealand Politics remains significant, as New Zealand is set to develop an independent infant formula standard following a Cabinet decision. The farming sector is, however, facing challenges due to new climate change strategies. ASB forecasts a milk price of $9.75/kgMS while Fonterra adjusts its forecast between $9.50 and $10.50/kgMS amid shifting global trends.

Modified: 2025/02/05