New Zealand dairy exports expected to be up nearly 6%

Published 25 July 19

Strong milk production and sustained global demand, especially China and South East Asia, have supported NZ dairy exports - which are forecast to increase 5.7% to $17.6bn for the year to 30 June 2019, according to the latest outlook from the NZ government.

 NZ MPI forecast

Export revenues were impacted by global price volatility for key commodities early in the season but have since recovered. The recovery of commodity prices also boosted on-farm profitability.

NZ exporters were given more opportunities to maximise returns when the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) entered into force in Dec 2018. The New Zealand dollar is on track to fall 2% this year which is also supporting increased export returns.

Milk production is forecast to rise 2.3% for the 2018/19 season, as favourable weather conditions supported good pasture growth in the first part of the season.

This is all against a background of declining herd size, anticipated to continue as the industry adjusts to increasing environmental pressures. Dairy farm productivity in New Zealand has experienced a compound average growth rate of 1.9% annually over the last 10 years. Continuing intensification is likely to be constrained by the regulatory constraints but continued improvement in genetics, farm management and technology to drive further productivity increases. 

 

Jennie Tanner