Wednesday, 21 February 2024 08:55

Dairy in a better shape to tackle looming wave of change

Written by  Peter Burke
Rabobank senior agricultural analyst Emma Higgins says dairy supply and demand looks more balanced. Rabobank senior agricultural analyst Emma Higgins says dairy supply and demand looks more balanced.

New Zealand is set to ride a wave of change in the coming year, but the dairy sector is in better shape than the red meat sector, says Rabobank senior agricultural analyst Emma Higgins.

Higgins says the dairy sector looks more balanced, due in part to less milk being produced in the coming 12 months by major milk producing nations and production matching demand, not flooding the market.

“The data shows that there are fewer hooves on the ground and milk yields are down, all of which will be to the advantage of NZ and help prices at the farmgate,” she told Dairy News.

A key factor for NZ is what is happening in China. Higgins notes that milk inventories in China, that have been high in recent times, are now declining along with the local milk supply.

She says this will set the scene for China to come back more positively into the market – especially in regard to whole milk powder.

“While this is good news, there are still some challenges ahead, with consumer data still showing us that sentiment is still weak and is not necessarily likely to change so much,” she says.

Higgins says the present situation is seen as a win for NZ, given the challenges that have existed in the Chinese market and still do for meat products.

But as in previous years there is still uncertainty. Higgins points to factors outside the control of NZ such as the Ukraine war and the attacks on shipping in the Red Sea. She says this could lead to another global supply chain shock, as occurred several years ago.

However, Higgins believes that the recent high farm input costs will likely see a reversal this year, resulting in more affordable fertilisers and agrichemicals.

“All this depends on what happens in the Middle East,” she says.

The other factor out of NZ’s control is the possibility of some global political instability. Almost half of the world’s population is set to go to the polls in 2024. Higgins says these elections are taking place in country’s which are some of NZ’s key trading partners such as the US, the EU, UK, Korea and Indonesia.

At the same time, NZ will have to tread a fine path with China – our biggest export market.

“Maintaining good relations with China is crucial for our farmgate prices,” says Higgins.

She says NZ must walk a fine line between standing up for its own values while constructively engaging with such a huge market, which gives us preferential access and can pay a premium for our products.

More like this

Dairy demand on the rise

There is increasing evidence that dairy demand is on the upswing, according to Rabobank senior agricultural analyst Emma Higgins.

Carrot and stick approach needed

With increasing and rising financial challenges, a well-balanced combination of carrot and stick will be needed to help dairy companies reduce greenhouse gas (GHG) emissions.


Farmers fined for cattle abuse

A Waikato cattle farming family have been fined $23,000 for failing to provide sufficient food and care for their animals, resulting in more than half a dozen animal deaths.

App trial yields promising results

An initial trial of an app, funded by Beef + Lamb New Zealand, has demonstrated significant results in reducing drench inputs during a small-scale study.


Share farmers with big plans

With only about eight weeks to go before their cows are dried off, the 2024 Manawatu Dairy Industry Awards Share…

Team effort brings results

For the team at Westmorland Estate Limited in Waikato, it has been another year of everyone working together to achieve…

Machinery & Products

New name, new ideas

KGM New Zealand, is part of the London headquartered Inchcape Group, who increased its NZ presence in August 2023 with…

All-terrain fert spreading mode

Effluent specialists the Samson Group have developed a new double unloading system to help optimise uphill and downhill organic fertiliser…

Can-Am showcases range

Based on industry data collected by the Motor Industry Association, Can-Am is the number one side-by-side manufacturer in New Zealand.

» Latest Print Issues Online

Milking It

Avian flu in cows

A lethal form of avian influenza has been confirmed in US dairy cattle in Texas and Kansas, the US Department…

China trade

OPINION: Last week's revelation that data relating to New Zealand MPs was stolen amid Chinese state-sponsored cyber espionage targeting two…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter