NZ milk production will increase slightly to 21.7bn kg in 2025  according to a new USDA GAIN report. Short-term factors affecting milk trends are strong farmgate milk prices and low interest rates, but New Zealand’s dairy sector continues to adjust to structural changes such as herd consolidation alongside continuing improvements in average yields per cow and improved farm management practices.

Even though WMP remains the dominant product, there is a notable shift towards cheese, SMP, fats and other specialty products. China accounts for about 30% of NZ dairy exports, and diversification into SE Asia and the Middle East is becoming increasingly important for managing trade risk.