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New Zealand's Dairy Industry in 2023

New Zealand continues to be a global leader in the dairy industry, celebrated for its high-quality, sustainable dairy products that are a cornerstone of its economic prosperity. With advanced production systems and strategic engagements worldwide, New Zealand's dairy sector plays a pivotal role in the global market.

Production and Processing Metrics

• Dairy Cattle: Approximately 5.1 million
• Annual Milk Production: Around 21.4 billion liters
• Milk Processing Volume: Approximately 20 billion liters per year
• Cheese Production: Projected to reach 375,000 tons by 2024
• Milk Powder and Whey Production: Estimated at 1.5 million tons per 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, New Zealand's dairy exports amounted to approximately NZ$18.2 billion, highlighting its significant role in the global dairy market. The country remains largely self-sufficient and imports minimal dairy products, although a noteworthy aspect is the 10% tariff on New Zealand's dairy imports to the U.S. market.

Significant Industry Events

Economic Factors

Inflation-driven rising operational costs have affected Synlait Milk's financial health, compounded by reduced support from Bright Dairy.

Acquisitions and Investments

• Westland Milk Products acquired a 60% stake in Pure Nutrition for NZ$31.1 million.
• Fonterra is investing $150 million into a new UHT cream plant in Southland.
• Miraka launched New Zealand's first green hydrogen dual-fuel milk collection tanker to enhance sustainability.

Market Dynamics and Outlook

Fonterra has recorded record-high farmgate prices and revised its milk payout forecast upwards, with favorable weather conditions leading to a 5.2% increase in milk collections. Strategic alliances, such as partnerships with the UAE, have strengthened New Zealand's position in global trade. In early 2023, Pāmu reported a notable half-year profit of $62 million.

Environmental and Market Challenges

Greenpeace Aotearoa has criticized Fonterra's use of palm kernel, emphasizing escalating environmental concerns. Meanwhile, Fonterra's potential IPO for Mainland Group signifies evolving strategic directions. Anhydrous milk fat prices have declined, while butter prices have risen, contributing to an 8% increase in Fonterra's net profit for the first half of the year, totaling $729 million. Interest in goat's milk products is also increasing, presenting new diversification opportunities.

Global Trade and Relations

New Zealand, a staunch advocate for free trade, leverages platforms like the WTO to bolster its trade relations. The "Science for Farmers" initiative aims to enhance sustainability and productivity within the sector. With a significant role as a supplier to China, New Zealand is exploring deeper trade relations with India through comprehensive FTAs. Recent trends show increasing cheese imports from China and Fonterra's revised autumn season farmgate milk prices. The dairy property market shows strong recovery post-Covid-19, although challenged by rising on-farm expenses.

Notably, over 500 farmers participated in Fonterra's April Fixed Milk Price (FMP) offering, securing a price of $9.60 per kg of milk solids for parts of their 2026 production, showcasing strong global interest in New Zealand's dairy potential. New Zealand Trade Minister Todd McClay remains cautious about launching a legal challenge against the US over recent tariffs, prioritizing dialogue and the collection of data. New Zealand's dairy sector shows resilience with increased milk production despite global volatility. New Zealand saw a positive adjustment in milk prices, reaching 41.5 cents per kilogram in February.

Discussions revolved around regulatory and tax burdens, with claims that lowering them could boost competitiveness.

Modified: 2025/04/30