Milk production in New Zealand on the rise again
New Zealand's dairy industry is considered a world leader. Milk production, which is based exclusively on grazing without any significant use of concentrated feed, amounts to almost 20 million tons or around 3% of global milk production. With an average milk yield of 5,000 kg, around 4.2 million cows are kept on the North and South Islands. New Zealand's milk production has increased by more than 12% since 2009 to 2013. However, the dairy industry has to reckon with drought-related setbacks from time to time, as was the case in the spring of 2013. Unlike in other countries, the lack of grass growth immediately translates into reduced performance. The cow population regularly has to be reduced by slaughtering as much as the remaining feed is sufficient for the remaining cow herd.
More than 95% of production is exported in the form of dairy products. New Zealand leads the world trade in dairy products such as whole, skimmed and buttermilk powder, butter and cheese, as well as some dairy specialties. FONTERRA is the world's largest dairy, processing and exporting 95% of New Zealand's milk. The main sales area is the entire Asian region, with a focus on milk powder sales to China. However, import markets have also been developed beyond this.
Sales are increasingly taking place via a fortnightly internet auction, the price results of which attract worldwide attention and serve as a guide. The prices are sometimes agreed for 6 months in advance.
A significant upturn is expected again for the dairy year from August 2013 to July 2014, as sufficient rainfall fell during the dormant period between May and July 2013. Grass growth is sufficient, at least for the start-up phase. Production peaks in the months of Sept/Oct, after which lactation rates slowly fall.
The payout price is based on the milk solids. In the past year, over NZ-$ 5.5 was already paid out without additional payment. The announcements for the coming year 13/14 are for over NZ-$ 7.5. These are high amounts for New Zealand dairy farmers, as in previous years the range was between NZ-$ 2 and NZ-$ 3.
