January 24, 2024

New Zealand dairy sector resilient despite climate challenges

In the face of challenging climate conditions during the 2022/23 season, New Zealand's dairy sector has demonstrated resilience, according to the annual New Zealand Dairy Statistics report jointly released by DairyNZ and Livestock Improvement Corporation (LIC), The Valley Profile reported.

Despite factors such as inflationary pressures and global supply chain issues, the sector maintained strong production levels, showcasing innovation and adaptability.

The report reveals that during the 2022/23 season, milk production remained robust, with dairy companies processing 20.7 billion litres of milk containing 1.87 billion kg of milk solids. Although there was a slight decrease of 0.4% in litres produced, there was a corresponding increase of 0.3% in kg of milk solids. The industry saw an uptick in milk production per cow, yet the ongoing trend of declining cattle numbers continued, experiencing a 3.46% decrease to 4.67 million cattle.

Campbell Parker, CEO of DairyNZ, commended farmers for their adept management of challenging conditions, including the impact of Cyclone Gabrielle and elevated on-farm costs. He highlighted the sector's commitment to leveraging technology and information for efficient milk production, emphasizing the role of insights and tools in enhancing herd sustainability and productivity.

The season also witnessed an increase in the percentage of cattle herd tested, reaching 81.1% of total cattle tested, the highest percentage on record. Artificial breeding remained relatively stable at 82% of cattle, indicating farmers' focus on improving cattle efficiency.

LIC CEO David Chin underscored the sector's achievement in producing more milk solids from a smaller cattle population, showcasing farmers' dedication and investment in solutions supporting sustainability and efficiency. The average dairy co-operative pay-out (including dividends) for the 2022/23 season was NZD 9.26 (US$5.65), the second-highest inflation-adjusted pay-out for farmers on record.

Despite facing a drop in the expected milk price for the 2023/24 season, with Fonterra's midpoint forecast at NZD 7.50 (US$4.58) per kg of milk solid, New Zealand dairy farmers remain resilient and adept at managing volatility. The sector contributes significantly to GDP, supports local communities, and sustains approximately 55,000 jobs nationwide.

Parker highlighted that, despite climatic challenges, dairy export revenue is anticipated to increase to NZD 25.1 billion (US$15.3 billion) for the 2022/23 season.

-       The Valley Profile