Whole Milk Powder Loses Weight in New Zealand Exports
The volume reflects long-term structural adjustments such as herd consolidation and the absence of significant expansion in the dairy sector. Factors like increased productivity per cow and improved management practices also play a role. In the short term, production benefits from high producer prices and lower interest rates.
Given its small population, New Zealand's dairy processors remain export-oriented, focusing on global markets for growth. Whole milk powder (WMP) continues to be the primary export product by volume, though there's a shift towards other sectors such as cheeses, dairy fats, skim milk powder (SMP), and specialty products.
Change in Export Structure
The USDA office in Wellington estimates fluid milk exports will reach 250,000 tons in 2025, slightly lower than USDA's projection. This volume aligns with 2024 shipments, totaling 245,836 tons, amidst growing milk diversion towards more processed dairy products. China remains the leading destination, accounting for three-quarters of total exports.
In recent years, New Zealand's dairy processors have made significant capital investments to modernize facilities, with a strong focus on sustainability and product diversification. Many plants are moving away from coal as an energy source, switching to more sustainable alternatives like wood biomass, natural gas, and electricity.
Simultaneously, a strategic sector shift is underway: bulk milk powder production is being deprioritized in favor of more valuable fresh dairy and special products like butter, cheeses, and cream. This shift is evident in trade data: whole milk powder (WMP), which accounted for 45% of New Zealand's total export volume in 2018, dropped to 40% in the first quarter of 2025.
At the same time, processors have expanded their capacity for functional and specialty products like infant formulas, whey and milk protein concentrates (WPC, WPI, MPC), lactoferrin, caseinates, and other high-value dairy ingredients.
