Dairy production stable despite climate conditions

The report, released by DairyNZ and Livestock Improvement Corporation (LIC) shows an innovative dairy sector producing well, despite climatic challenges, inflationary pressures, and global supply chain issues.

In the 2022/23 season, milk production remained relatively stable with 20.7 billion litres of milk containing 1.87 billion litres of milksolids processed by dairy companies. This represented a 0.4% decrease in litres produced, but a 0.3% in kilograms of milk solids.

While milk production per cow increased, the trend of declining cow numbers continued with a 3.46% decrease to 4.67 million cows.

DairyNZ chief executive Campbell Parker emphasizes the good work farmers have done to manage conditions including Cyclone Gabrielle and high on-farm costs, and the varying impacts these had on farm operations.

“New Zealand dairy farmers continue to focus on using technology information to milk efficiently, while managing their individual farm conditions,” says Parker.

“These insights are driving better decisions, while a range of tools help improve herd sustainability and productivity.”

The season saw an increase in the percentage of cows herd tested, at 81.1% of total cows tested (3.79 million cows, the highest percentage on record) while artificial breeding remained relatively stable at 3.81 million cows (82% of cows).

LIC chief executive David Chin says the increase in individual cow milk production and uptake of herd improvement services demonstrates farmers’ sharpened focus on cow efficiency.

“Our sector is producing more milksolids from a smaller cow population, and this is testament to the great work of Kiwi dairy farmers,” Chin says.

“Despite a challenging season, farmers have continued to invest in solutions that support them to produce the most sustainable and efficient animals for their herd,” he says. “The use of high genetic merit sires and record number of cows being herd tested is enabling farmers to breed highly efficient cows that produce more and have a lower emissions intensity profile.”

The average dairy co-operative payout (including dividends) from Fonterra and Tatua was $9.26 for the 2022/23 season, which is the second highest inflation adjusted payout for farmers on record.

New Zealand dairy farmers are resilient and accustomed to managing volatility, with the sector experiencing a drop in expected milk price for the 2023/24 season. The current Fonterra midpoint forecast sits at $7.50 per kg of milksolid.

Parker says that dairy plays a large role in contributing to GDP and supporting the prosperity of local communities, as well as providing approximately 55,000 jobs nationwide.

“While managing climatic conditions, dairy export revenue is expected to increase to $25.1 billion in for the 2022/23 season.

“We should all be proud of the dedication of the dairy sector and what is achieved even in difficult seasons as we continue to deliver economic growth for New Zealand.”

Key statistics

• The dairy sector produced 20.7 billion litres of milk, containing 1.87 billion kilograms of milksolids – a 0.4% decrease in litres and a 0.3% increase in milksolids processed compared with the previous season.
• Average milk production per cow was 393 kg of milksolids (made up of 221 kg milkfat and 173 kg protein), a 1.8% increase from 386 kg last season.
• Cow numbers declined, down to 4.67 million, a decrease of 3.5% from the previous season.
• A total of 3.79 million cows were herd tested (81.1% of cows).
• 3.81 million cows were mated to artificial breeding, which is 82.0% of total cows mated to AB.
• The trend of increasing breeding worth and production worth continued across all breeds.
• The average dairy co-operative payout of $9.26 per kg milksolids was the second highest payout on record, decreasing from $9.52 in the previous season.