Season wraps with strong production, steady demand and healthy export returns supporting farmgate confidence, says Cristina Alvarado.
May marks the end of the dairy season in New Zealand, and right up to the final days, we’ve continued to see movement across the industry.
From stronger-than-expected April milk production figures to mixed Global Dairy Trade (GDT) results, global supply dynamics remain varied, while concerns around international tariffs linger in the background.
New Zealand recorded a relatively flat result for April, with milksolids production up a marginal 0.1% year on year to 150.1 million kilograms.
This brings the season-to-date figure to a 2.7% improvement over 2023/24. Compared to the five-year rolling average of 149.9 million kilograms, this year’s April result sits just 0.2% higher.
Globally, milk production trends remain mixed. Argentina continues to show strength with a 15.2% lift in April. The United States posted a 0.9% increase in March, though this came in below market expectations. Uruguay also saw a 2.9% YoY lift in March. Meanwhile, the EU27 reported a sharp -5.7% drop in February milk volumes, though this narrows to -2.3% when adjusted for the leap year. Australia recorded a marginal decline of -0.1% in March. In China, the last available data showed a notable -8.6% drop in February milk production, pointing to continued tightness in supply across parts of the world.
On the GDT front, Event 379 in early May delivered a solid 4.6% index gain, with all products up except for mozzarella, which edged down 0.3%. The surge was driven by a 59% lift in purchasing by southeast Asia/Oceania, which accounted for 38% of the total volume traded.
The month’s second event (Event 380) ended with a modest -0.9% decline, as buying demand softened in key regions. Notably, southeast Asia/Oceania and Europe reduced their purchases by 50% and 18%, respectively. These moves reflect the volatility in short-term buyer sentiment, though overall demand remains stable.
March export data further reinforced New Zealand’s strong market position. Total dairy exports rose 7.1% YoY, with standout growth in cheese (up 39%) and butter (up 25%). By contrast, dairy exports from the US dropped -6.8% in February, and European exports fell by -11.4%. However, China continues to import strongly, with dairy imports up 15.9% in March.
Towards the end of April and into early May, a few members of the NZX Dairy and SGX-NZX Dairy Derivatives teams were in Chicago during the American Dairy Products Institute (ADPI) annual conference, providing a timely window into industry concerns following President Donald Trump’s “Liberation Day” tariff announcements.
While there was cautious optimism that a future Trump-led administration might roll back some of these measures – which later did eventuate with the over-10% tariff “pause” – uncertainty persisted. Some shipments from China to the US had already been halted, and costs for certain consumer products in the US were reportedly rising.
New Zealand was included in only the 10% tariff bracket, but the broader impact of US tariffs on Chinese and Asian goods could disrupt trade flows more widely.
The “pause” on reciprocal tariffs is currently expected to end in early July, with further action on Chinese goods scheduled by August. For New Zealand exporters, this situation presents both opportunity and risk. On one hand, we may be seen as a reliable supplier amid rising US trade barriers. On the other, prolonged disruption could suppress demand if higher prices are passed on to consumers and consumption habits begin to shift.
All in all, it remains a favourable time to be a dairy farmer in New Zealand – for now. Strong production, steady demand, and healthy export returns are supporting farmgate confidence. But as always, it’s a prudent time to think ahead and consider how to manage risk – especially when so many external factors, from trade policy to global weather patterns, can change the outlook quickly. Staying informed and adaptable will be key.
By Cristina Alvarado, NZX head of Dairy Insights
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