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The Dairy Industry in New Zealand
2020-10-21

Although New Zealand is only a “small” country with a population of less than 5 million, its dairy industry is very well developed. Statistics on dairynz.co.nz/ shows that there are 4.95 million milking cows in New Zealand. 1.74 million hectares are believed to be totally effective and suitable dairyland. The average farm size is 153 ha.

Reason for the Thriving New Zealand Dairy Industry

Natural Advantages: New Zealand has a temperate oceanic climate with perfect rainy conditions, abundant precipitation and mild sunshine, which is conducive to the growth of succulent pastures. And New Zealand has a large area of plains and vast pastures. The rapid growth of pasture and the peak milk production of dairy cows are greatly affected by the weather. Due to the shortage of pasture in autumn, dairy farmers will let cows produce milk in spring, summer and autumn, leaving the dry period in winter. The dairy industry's demand for milk is greatest in the spring and will continue throughout the summer. Therefore, the seasonal milk production system makes the cost of milk production in New Zealand far below the world average. And because New Zealand cows mainly eat fresh grass in the open-air grassland, cows are grazing outdoors most of the time, enjoying fresh air and water, so cows are in good health.

Technology innovation: Technological innovation is an important factor in the success of the New Zealand dairy industry. Early innovations included the introduction of cream separation technology and mechanical milking equipment in 1884. The innovation of animal identification, record and tracking system has also enabled New Zealand's cow management to achieve a higher level. New Zealand has also conducted vigorous research on cattle breeding technology and soil science.

New Zealand Dairy Products

New Zealand is the world's largest exporter of butter and skimmed milk powder, and the world's second-largest exporter of cheese and whole milk powder. USDA published the New Zealand annual dairy and products report on October 15, revealing the newest forecast for New Zealand dairy products.

Butter and Anhydrous Milk Fat (AMF): The production of butter and AMF in 2019 is 509,000 metric tons (MT). According to USDA, the production estimate for 2020 for total AMF and butter has been revised to 525,000 MT, and the estimate for 2021 is 520,000 MT.

Cheese: The cheese production in 2019 reached 335,000 MT, and the production forecast for cheese in 2020 has been revised to 350,000 MT. The estimating production in 2021 is 360,000 MT, nearly three percent up on 2020.

Skim Milk Powder (SMP): The SMP production in 2019 was 373,000 MT. Production of SMP in 2020 has been revised up to 400,000 MT, 6.7 percent greater than 2019

estimate.

Whole Milk Powder (WMP): The WMP production in 2019 was 1,536,00 MT. For 2020, the revised total production is estimated at 1.5 MMT. By 2021, it is forecast that 1.48 MMT of WMP will be made, which would be 1.7 percent less than 2020.

Contribution of New Zealand Dairy Industry

Domestically, this important industry provides a great number of job opportunities for New Zealanders. Nearly 46.000 people are engaged in the dairy industry. A number of dairy farm owners/operators reaches to approximately 8,000. The advancing industry also makes a significant part of the financial revenue. In 2017-2018, dairy farming contributes 28% of the total value that New Zealand earned from its merchandise exports, which is about two and a half times greater than the meat sector, more than three times the wood sector, and ten times the wine sector.

Globally, New Zealand is one of the most crucial providers of dairy products. It produces 3% of all the milk in the world.