Sunday, 12 June 2016 12:28

Value of dairy exports down

Written by 
Falling prices, rather than lower volumes, have pushed down the value of dairy product exports. Falling prices, rather than lower volumes, have pushed down the value of dairy product exports.

Falling prices, rather than lower volumes, have pushed down the value of dairy product exports over the past two years, Statistics NZ says.

The value of exported dairy products fell $1.5 billion between the December 2013 quarter and the March 2016 quarter, down 37%.

The lower export value was driven largely by price, as the volumes of milk products exported have remained relatively steady.

The percentage of New Zealand's annual export value that comes from dairy has generally increased over the last decade, Statistics NZ says. However, in the most recent year from 2014 to 2015, it dropped from 32% to 26% of New Zealand's goods exported. The main contribution to this fall in value was milk and cream, which includes milk powder. Butter also fell, while cheese rose 5%.

Most of New Zealand's dairy product exports are sold by Fonterra. Their forecast farm-gate milk price for the 2016/17 dairy season is currently $4.25/kgMS – well down from the peak of $8.40/kgMS, in the 2013/14 season. According to Dairy NZ, for the average New Zealand dairy farm to break even, the price needs to be $5.25.

The prices dairy cattle farmers receive (the output prices) are at a nine-year low. They have fallen by more than half since the recent peak in 2014.

In the March 2016 quarter alone, the dairy cattle farming prices received (outputs) fell 6%, as measured by the business price index. Dairy export prices rose 5.1% in the March 2016 quarter, influenced by milk powder (up 4.2%).

Globally, the prices of dairy products have been falling in 2016. The GlobalDairyTrade (GDT) price index mostly fell in the March 2016 quarter, with some rises through April. The GDT however, represents a small proportion of dairy products exported by New Zealand. For example, the total volume of dairy products exported by New Zealand in the March 2016 month was 223,000 tonnes – the GDT only traded a total of 42,286 tonnes in the same period.

With lowered milk-solid payouts due to weak international demand and increasing global supply, the number of dairy cattle decreased in 2015, for the first time since 2005. Agricultural production statistics show there were 6.5 million dairy cattle at 30 June 2015, down 213,000 (3%) from the same time in 2014.

More like this

Plan to protect land

Farmer groups are backing Government proposals to prevent productive land from falling to housing development.

Milk powder rise in value

Milk powder rose $48 million in value in January 2017, despite the quantity exported falling by around 19,000 tonnes or 9.4%, Statistics New Zealand says.

Dairy leads export rise

Dairy products led a rise in total exports in October, but meat and offal exports were down from the same month last year, Statistics New Zealand says.



Judge named for on-farm comp

Waikato contract milker Corey Ferguson has been named as the judge for the New Zealand Agricultural Show’s on-farm competition in November.

» The RNG Weather Report

» Latest Print Issues Online

Milking It

A ticking timebomb?

There could be another dairy health scare brewing in China and this one starts in our backyard.

Please explain

Does anyone in the Government understand the essential role St John Ambulance has in our society?

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter