New Zealand Dairy Industry Sees 9.2% July Production Boost Amid Global Market Challenges

New Zealand 01.10.2024

Source: DairyNews.today

New Zealand's dairy industry kicked off the 2024-25 season with a notable recovery in July, despite a slower start in June. Milk production reached 27.4 million kilograms of milksolids, marking a 9.2% year-on-year (YoY) increase and the highest July on record. This performance exceeded the five-year rolling average by 6.2%, with total tonnage production reaching 310,000 tonnes, reflecting an 8.4% YoY rise. Despite the strong start, the industry remains cautious as peak production, typically occurring between September and November, is still ahead.

New Zealand Dairy Industry Sees 9.2% July Production Boost Amid Global Market Challenges

Projections indicate continued growth, with YoY production increases expected at 3.7% in August, 1.8% in September, and 0.8% in October. However, weather patterns could introduce volatility to pasture growth and overall production.

Globally, dairy markets displayed mixed results in July. U.S. milk production fell by 0.4% YoY, while Argentina and Uruguay experienced sharper declines of -4.8% and -9.2%, respectively. In contrast, Australia and Europe reported production growth of 1.6% and 1.3%, respectively.

New Zealand dairy exports in July surged by 10.2% YoY, driven by strong demand for skim milk powder (SMP), cheese, and infant formula, particularly from China and other Asian markets. However, anhydrous milk fat (AMF) and butter exports experienced a decline in volume.

Global Dairy Trade (GDT) auctions in August reflected these mixed market trends. GDT Event 362 on August 20 recorded a significant 5.5% index surge, marking the largest increase since March 2021, following a modest 0.5% rise earlier in the month. However, the first September auction saw a slight 0.4% dip, as whole milk powder (WMP) prices eased while SMP strengthened.

Industry participants are advised to stay informed through key events like the upcoming SGX-NZX Global Dairy Seminar in October, which will provide insights into the evolving global dairy landscape.