Production Jumps 17.8% in June, Fueling Optimism for Coming Season.
New economic analysis paints an exceptionally bright picture for the New Zealand dairy industry, confirming that June marked a bumper year and forecasting another significant increase in earnings for the upcoming season. This optimistic outlook is primarily driven by a sharp 17.8% rise in milk solids production in June compared to the previous year, an impressive feat considering June is typically a low-production month due to cold weather. This strong performance highlights the resilience and productivity of NZ dairy farmers.
ANZ economists are projecting a particularly robust spring (August to October), propelled by sustained global demand for milk and dairy products, which has consistently driven up dairy prices. Reflecting this positive market sentiment, Fonterra’s opening price of $10.00 per kilogram of milk solids underscores the favorable conditions for dairy producers. Such strong pricing signals are crucial for the profitability and confidence within the dairy sector.
Several on-farm factors are contributing to this positive output trajectory. New Zealand’s dairy farms are benefiting from strong pasture growth, indicating healthy feed conditions for herds. Furthermore, improved cow pregnancy rates signal strong future herd numbers, while fewer culls suggest healthy and productive dairy cow populations. These combined elements point towards a sustainable increase in milk production capacity.
The preceding season also showcased robust growth, with a 3.0% increase in milk production—the largest year-on-year improvement since the 2014/15 season. Building on this momentum, a projected growth of 1-3% is anticipated for the 2025/26 season. These consistent increases solidify New Zealand’s position as a reliable and expanding supplier in the international dairy market.
A key advantage for the New Zealand dairy industry stems from global supply constraints. Insufficient dairy production in other major exporting countries, due to challenges such as adverse weather, bird flu (HPAI), and the Bluetongue virus, has created a global shortage. This international supply deficit ensures that dairy returns for New Zealand farmers remain above the cost of production, cementing the nation’s competitive edge in dairy economics.
Source: Interest.co.nz: New economic analysis says June was a bumper year for dairy industry and coming season
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