Dairy

The importation of two cows and a bull in 1814 marked the beginning of the New Zealand dairy industry.

Since this date, dairying has gone on to become New Zealand's top merchandise export earner.

The New Zealand Institute of Economic Research (published Dec 2010) estimates the industry, including downstream activities such as marketing, wholesaling and transport, contributes around 2.8% to New Zealand's GDP and 10.4 billion of export earnings. Read more in the NZIER report

Approximately 97 percent of milk produced in New Zealand is processed into dairy products, with the balance sold on the domestic liquid milk market.

Facts and figures

  • New Zealand accounts for about one-third of cross-border trade in dairy products, but we only account for a little over 2% of total world milk production. By comparison the US accounts for about 12% of total world production.
  • New Zealand dairy exports went to 151 countries (year ending Dec 2009) key markets being China, the US, Japan and the EU.
  • Developing countries are the destination for about 72% by export value.
  • New Zealand dairy production has risen 77 percent over the past 20 years - from three million dairy cattle in 1989 to six million dairy cattle in 2009.
SOPI June 2012 - Dairy sector production and export value
  ACTUAL FORECAST
Year 2009 2010 2011e 2012 2013 2014 2015 2016
Cows and heifers in calf or in milk1 (mil) 4.35 4.61 4.68 4.82 4.93 4.96 4.98 5.17
Milk solids produced2 (mil kg) 1394 1437 1472 1555 1600 1619 1638 1768
Milk price2 (cents per kg milk solids) 472 610 709 687 727 785 864 783
Total export value ($ million)3 11429 10562 13042 14576 15575 16742 18287 17033

Notes

* Estimate
1. As at 30 June (opening numbers).
2. Year to 31 May.
3. Year to 30 June.

Sources: Statistics New Zealand, DairyNZ, Fonterra Co-operative Group, and MPI.

Legislation governing the dairy industry

The New Zealand dairy industry has been a world leader in herd improvement, and its ability to trace the performance of the national herd – through the dairy core database – has been central to that success. The Ministry for Primary Industries (MPI) concluded consultation in May 2014 on aspects of the New Zealand dairy herd improvement industry, in particular, three requirements that are currently in place on Livestock Improvement Corporation. More information on this archived consultation can be found at the link here. This consultation follows on from earlier consultation in February 2013. For more information on the February 2013 consultation, click here.

Archived Consultation - Consideration of Restrictions on Livestock Improvement Corporation

All submissions must be received by 5PM on 15 February 2013.

The Dairy Industry Restructuring Act (2001) was a specific Act of Parliament. The Act and its associated regulations, the Dairy Industry Restructuring (Raw Milk) Regulations 2001, allowed for the formation of Fonterra. Read more on the Dairy Industry Restructuring Act (DIRA).

On 24 January 2012 the Minister for Primary Industries announced that consultation had opened on the government’s proposed response to reviews of Fonterra’s farm gate milk price setting, the Raw Milk Regulations, and the regulatory regime to accompany Fonterra’s proposed capital restructure.

Submissions closed Friday 24 February and MPI received over 800 submissions. On 27 March 2012, the Government announced changes to the Dairy Industry Restructuring Act (DIRA) following the consultation on potential amendments.

Read more about the review and the submissions received.

Milk Price

In 2011 MPI produced a Domestic Milk Market in New Zealand report that looked into the domestic milk market in response to questions raised by consumers about milk pricing. The report provides a basic overview of domestic prices for milk products, the role of Government and information on the regulatory environment.

A briefing on Fonterra's Farm Gate Milk Price was provided to the Commerce Select Committee in June 2011 providing information on how Fonterra sets the price it pays farmer shareholders for their milk and the flow on effects that price has for the wider dairy industry in New Zealand. It was provided to assist the Committee and does not represent final advice or government policy.

Animal Welfare

Codes of Welfare

Codes of Recommendations and Minimum Standards

Managing Environmental Impacts

Dairying and Clean Streams Accord

On 26 May 2003, the Dairying and Clean Streams Accord was agreed between Fonterra Co-operative Group, the Minister for the Environment, the Minister of Agriculture, and regional councils. The Accord expired at the end of 2012.

The parties to the Accord agreed to work together to achieve clean healthy water, including streams, rivers, lakes, groundwater and wetlands in dairying areas.

The Accord is both a statement of intent and a framework for actions to promote sustainable dairy farming in New Zealand.

Stock Exclusion Survey

The Stock Exclusion Survey Report is an independent survey commissioned by MPI to assess progress by dairy farmers towards achieving the Dairying and Clean Streams Accord (the Accord) target of dairy cattle to be excluded from 50 percent of streams, rivers, and lakes by 2007, rising to 90 percent by 2012. The objective was to conduct a nation-wide field-based survey to observe and assess stock exclusion from Dairying and Clean Streams Accord type waterways on a representative sample of Fonterra dairy supplier farms.

Overseer Nutrient Budgets

OVERSEER® is an agricultural management tool which assists farmers and their advisers to examine nutrient use and movements within a farm to optimize production and environmental outcomes.
The computer model calculates and estimates the nutrient flows in a productive farming system and identifies risk for environmental impacts through nutrient loss, including run off and leaching, and greenhouse gas emissions.

Information for exporters

Exporting Animals and Animal Products

Export Licences and Dairy Quota

Export licences are required for exporting certain dairy products under quota programmes to the United States, the European Union, Japan, and the Dominican Republic. The link below provides information on who is eligible, and how to apply for these licences.

Frequently asked questions on Export Licences and Dairy Quota

Information on herd testing

Approved certification bodies and certified herd testers

Resources

Farm monitoring

MPI runs an annual farm monitoring process to examine the production and financial status of farms in terms of the cash income and expenditure.

The outcomes are published in MPI's Farm Monitoring Reports. Trends, issues and dairy sector concerns are also monitored and reported annually.

SOPI

MPI's Situation and Outlook for Primary Industries (SOPI) report provides an annual overview of issues faced by the dairy industry. The latest version of this document can be found by searching “SOPI” on the Publications web page.

 

Last Updated: 02 July 2014

Contact MPI

for general enquiries phone

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