Milk Monitor

Making more with less

By Gerald Piddock

Each month the milk monitor delves into the dairy industry and gives us the low-down on the good, the bad, the ugly and everything in between.

The annual New Zealand Dairy Statistics has highlighted the massive contribution the industry has made to the economy over the past year, as well as throwing up some interesting facts about the state of the industry.

It rounded off a great end to 2020 and many farmers can look back at what they achieved with a great deal of satisfaction.

There is the huge feel good factor with record-high milk production for the 2019-20 season, with dairy companies processing 21.1 billion litres of milk containing 1.90 billion kilograms of milksolids.

That is a 0.6% increase in milksolids from the previous season.

Average milk production per cow also increased from 381kg MS last season to 385kg MS this season, while the latest count showed that NZ has 4.921 million milking cows – a decrease of 0.5% from the previous season, or just under 25,000 fewer cows. dollars earned from total goods exports

This is again down significantly from and services in the year to September peak cow numbers in 2014-15, which 2020. were at over five million. The analysis by Recent Sense Partners

So, per cow production went up showed the sector delivered $20 billion in despite there being about 56 fewer herds export value. across the country. At a regional level, in 2019 the sector

From a regional perspective, most of accounted for more than 5% of GDP in the cow number reductions have come seven regions – and more than 10% in from the North Island, which is hardly four of those. surprising given the effect of last season’s The West Coast had the greatest GDP drought. from dairy, at 16%.

Waikato had the largest reduction with It contributed nearly $2 billion in around 13,000 fewer cows, but there were Canterbury, $2.5 billion in Waikato and is also reductions in Northland, Auckland, a significant employer in many districts, Hawke’s Bay and Wairarapa. accounting for one-third of jobs in

In other words, farmers made more Waimate and one in four jobs in South with less – largely down to better Taranaki and Otorohanga. genetics and probably better feeding too. It marks off what has been a very

The number of cows being herd tested positive Christmas and holiday period for was the highest on record this year, with farmers. The rain in early January came a total of 3.689 million cows tested – just in the nick of time for many in the equating to 75% of all cows. North Island as soils started to dry out.

The stats also highlighted the role the Global demand is also holding up dairy sector was playing in the economy, well, reflected in the new year’s first GDT contributing nearly one in every four auction, where there was a 3.9% price Dairy farmers were able to produce more milk with fewer cows in the 201920 season.

index lift and there was an average price of US$3420/ tonne.

Whole milk powder had its fourth consecutive price gain, while butter continued its rise, up for the seventh time with prices reaching levels last seen in June 2019.

The result has put upward pressure on forecasts by the banks and other outlets. NZX lifted its forecast nine cents to $7.36/ kg MS in early January, while Rabobank lifted its forecast to $7/kg MS prior to the auction just before Christmas to bring it in line with Westpac and ASB.

ANZ revised its forecast for this season from $6.70-$7.20/kg MS, which is at the upper end of Fonterra’s milk price guidance.

Its forecast update says that if prices do remain near current levels, then next season’s milk price is likely to be higher than the $6.40/kg MS currently being forecasted.

However, it predicted a stronger NZ dollar would mean it is unlikely to match the current season’s milk price. n