Tuesday, 29 July 2025 12:55

NZ milk production surges 17.8% at start of 2025/26 dairy season

Written by  Staff Reporters
ANZ agricultural economist Matt Dilly believes the stars are aligning for a strong spring. ANZ agricultural economist Matt Dilly believes the stars are aligning for a strong spring.

New Zealand milk production is off to a strong start, with the first month of the 2025/26 dairy season recording a whopping 17.8% jump in milk production, compared to the previous season.

While June and July, are the seasonal lows and their milk production numbers don’t typically draw much attention, ANZ agricultural economist Matt Dilly believes the stars are aligning for a strong spring – from August to October – led by a signal from the market that the world needs more milk.

Dilly says high global dairy prices are encouraging farmers to increase production where possible, both in New Zealand and overseas.

Fonterra’s opening milk price is $10/kgMS and falls within a wide forecast range of $8 to $11/kgMS. ANZ is also forecasting a milk price of $10.

The milk production boost is driven by good pasture growth over winter, providing plenty of feed available under foot. This includes a recovery from drought conditions that impacted Waikato and Taranaki from January to March 2025.

Dilly notes that great reproduction metrics, particularly the 6-week in-calf rate, mean more cows ready to be milked earlier in the season.

“The metrics were good last year and even better this year,” he says.

This winter’s dairy cow cull numbers are roughly 8% lower than last year. Farmers have been drying off their herds as late as possible, and they are also likely to keep older cows past their ‘best before’ date to boost production in 2025/26.

Dilly says a surge in palm kernel expeller (PKE) imports - up 34% in the past year - should provide support on the shoulders of the coming season.

“Last season’s milk production was up 3.0%, the largest year on year gain since 2014/15,” he says.

The weather was very good last year despite challenges in Southland, Taranaki, and Waikato.

“The extra feed on hand this year provides a buffer, but the weather tends to drive milk production in New Zealand, says Dilly.

“It is hard to make large gains two years in a row, but with the stars aligning, growth of 1-3% should be attainable in 2025/26 if the weather cooperates. The expansion signal from the market is much stronger this year – recall Fonterra’s opening milk price was just $8/kgMS last year – and Southland should rebound with vigour.

“If this comes to pass, it would be the second straight year of high prices and high output, a rare and very welcome combination for New Zealand’s rural sector.”

More like this

Best placed to help in a crisis

OPINION: Two years on from Cyclone Gabrielle, I've learned that while the power of Mother Nature is formidable, it is more than matched by the extraordinary capacity of locals to recover and rebuild.

Featured

Dr Mike Joy says sorry, escapes censure

Academic Dr Mike Joy and his employer, Victoria University of Wellington have apologised for his comments suggesting that dairy industry CEOs should be hanged for contributing towards nitrate poisoning of waterways.

People-first philosophy pays off

The team meeting at the Culverden Hotel was relaxed and open, despite being in the middle of calving when stress levels are at peak levels, especially in bitterly cold and wet conditions like today.

Farmer anger over Joy's social media post

A comment by outspoken academic Dr Mike Joy suggesting that dairy industry leaders should be hanged for nitrate contamination of drinking/groundwater has enraged farmers.

National

Machinery & Products

» Latest Print Issues Online

The Hound

Faking it

OPINION: Demand for red meat is booming, while it seems the heyday of plant-based protein is well past its 'best…

M.I.A.

OPINION: The previous government spent too much during the Covid-19 pandemic, despite warnings from officials, according to a briefing released…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter