New Zealand’s dairy industry achieved a remarkable milestone in 2024, producing 1.92 billion kilograms of milk solids (kgMS)—its highest output in five years.
According to the data released by the Dairy Companies Association of New Zealand (DCANZ). This represents a 2.1% increase from 2023’s total of 1.88 billion kgMS and is the best performance since 2020.
The tonnage basis also saw a significant rise, with 21.53 million tonnes of milk produced—a 1.3% improvement over the previous year. This marks the highest tonnage figure in three years, just shy of the 21.8 million tonnes recorded in 2021.
Seasonal Trends Drive Record Performance
The 2024 dairy season, which runs from June to May, saw production peak in October following the spring calving period. Improved weather conditions in the North Island were key contributors to this growth, with warmer temperatures, increased sunlight, and adequate rainfall supporting higher yields.
December 2024 rounded out the calendar year strongly, with 228.2 million kgMS produced—up 1.4% compared to December 2023. On a tonnage basis, this translated to 2.64 million tonnes for the month.
“While the first half of the year lagged behind 2023, the second half pulled ahead thanks to favourable conditions in peak months,” noted the DCANZ report.
However, the heavy rainfall in the South Island posed challenges for farmers in the region, tempering the overall increase.
Fonterra Leads the Industry
Fonterra Co-operative Group, which processes approximately 80% of New Zealand’s milk, has forecast production for the current season at 1.49 billion kgMS, the highest since the 2020/21 season.
The co-op’s latest Global Dairy Update highlighted the stark differences in conditions between the North and South Islands, attributing much of the increase to the favourable weather in the North.
The report stated, “October’s production increase was driven by optimal conditions in the North Island, while the South Island experienced disruptions due to heavy rainfall.”
International Factors Impacting Global Markets
While New Zealand’s production surged, international dairy markets faced disruptions. In Europe, the outbreak of bluetongue disease in Germany hindered milk production, while avian flu in California impacted US output.
These challenges contributed to mixed results in the Global Dairy Trade (GDT) auctions. At the first auction of January 2025, prices slipped 1.4%, with declines in key commodities like Skim Milk Powder (SMP) and Whole Milk Powder (WMP). However, there were signs of recovery at the GDT Pulse events.
WMP prices rose to US$3,782 per metric tonne (MT) at the most recent Pulse, up from US$3,721/MT on New Year’s Eve. Similarly, SMP climbed to US$2,735/MT, up from US$2,655/MT. Despite these gains, prices remained below levels seen at the 7 January GDT auction.
Resilience in a Competitive Global Market
New Zealand’s dairy industry has proven resilient in the face of global challenges, with the country leveraging favourable local conditions to achieve a record-breaking year.
“The combination of strong seasonal performance and global supply chain dynamics has positioned the sector for continued success,” said a spokesperson for DCANZ.