News

New Zealand’s dairy herd declines

For the first time in a decade, New Zealand’s dairy cow numbers have declined. Official government numbers say the herd has dropped 300,000 head to 6.4 million.  The 65-percent drop in global dairy prices since early 2014 is the reason.

New Zealand had been building its dairy herd since 2005 to meet growing demand from China. China has dramatically reduced dairy imports since early 2014 creating a global surplus of dairy products.  Adding to the surplus was Russia’s ban on purchases from nations involved in the Western-nations boycott over Ukraine.

The Reserve Bank of New Zealand says half of the country’s dairy farmers lost money in the 2014-15 production year. The bank projects four-out-of-five New Zealand dairy producers will have a negative cash flow in the current year.  Milk production is expected to decline by seven percent this year.

Most of the milk produced in New Zealand in marketed through Fonterra Cooperative. Fonterra is the largest dairy exporter in the world.