First Published 26/03/2025 Farming Independent.
Michael Brady.
Agricultural Consultant and managing director at Brady Group: Agricultural Consultants & Land Agents. The Lodge, Lee Road, Cork.
I recently visited New Zealand, it has been over 20 years since my last visit. It was interesting to observe the changes in a country whose main industry is agriculture or more precisely dairying.
The New Zealand Dairy Industry is still the powerhouse of the economy. It accounts for over $26bn (26%) of New Zealand total exports. In 2023 dairy export earnings surpassed those from meat, wool, forestry and seafood combined.
Just like Ireland over 95% of dairy products are exported to over 130 countries and consumed by 90 million people globally. The top five exporting countries are China, USA, Australia, Algeria and Indonesia. They certainly are formidable competitors for us on the global stage.
Table 1: New Zealand Dairy Industry Exports
| Year | $NZ |
| 2020 | 20,102 |
| 2021 | 19,055 |
| 2022 | 21,998 |
| 2023 | 26,008 |
| 2024 | 23,231 |
| 2025 proj | 25,500 |
| 2026 proj | 25,560 |
Perhaps a sign of the times is the New Zealand government department title for the sector now being Food and Fibre, no mention of the word agriculture!
For 20 years 147 new farms per year converted to dairy farming in New Zealand, this all ground to a halt when the previous government led by Jacinda Ardern banned new dairy conversions. This legislation has since been reversed and there are some suggesting a ‘Gold Rush’ into dairying is commencing. However, at a panel discussion I attended a number of dairy industry commentators disagreed on whether the recent increase in applications for permits to convert to dairying was a genuine trend or just a reaction to the lifting of the ban. Some farmers are being opportunistic investing $20,000 applying for a permit to convert to dairying as a value add to their property, the permit lasts for 10 years.
In reality, it appears to me the steam has run out of dairy expansion on New Zealand, just like at home. Yes, there will be some new conversions into dairying in suitable areas especially where the permitting laws are favourable but equally so, there will be dairy farmers exiting the industry in areas less suitable for dairy. Nationally, dairy cow numbers have fallen to 4.67m down by 6/8% from a peak in 2022/23.
Presently there are 10,601 herds in New Zealand with an average herd size of 441 per herd. Herd sizes are larger in the South Island when compared to the traditional dairy areas such as the Waikato in the North Island. This is because the more recent conversions to dairy occurred in the South Island. This is similar to home where counties such as Meath and Westmeath have larger herd sizes than the traditional dairy counties such of Cork and Tipperary.
Approximately 6,000 of the dairy farms are owner occupiers, 3,000 are share milkers and 1,500 are contract milkers. The sharemilking model which has served New Zealand so well facilitating with new entrants into dairying, allowing them a financially stable income while at the same time availing of the opportunity to grow net worth is coming under increasing pressure due to the lure of other industries. The attractiveness of dairying as a career choice has dimmed and landlords are looking for a bigger slice of the profit pie, just like home. Presently there is an economic recession in New Zealand and the youth are emigrating to Australia where they see more opportunity. This is a worry both for the dairy industry and the wider economy.
Progress has not stopped for those established dairy farmers. Milk production per cow has increased by 50% over the last 30 years. The 10 year average for national milk production is 1.87b kg milk solids a 1.3% increase over the past decade. Over 25,000 km of waterways have been fenced off from livestock in the period as new environmental laws were introduced to reverse the Dirty Dairy campaign waged against New Zealand dairy.
Over 85% of dairy farmers are implementing and reporting under an environmental plan to clean up waterways and improve biodiversity. There is ongoing research collaboration with Ireland and other countries in respect of Green House Gas emission mitigation strategies.
Animal welfare is now called ‘Animal Wellbeing’ and the drive is on to reduce calf slaughter (bobby calves). Approximately 40% of dairy bobby calves are transported to slaughter annually. This part of the New Zealand dairy industry appears to have a long way to go before they reach our standard this touchy area.
The infamous aversion to spending on capital expenditure on New Zealand dairy farms (low cost system) is also changing. With stronger balance sheets, a labour scarcity and a better work life balance ethos coming in New Zealand dairying, investments in buildins, machinery and technology are on the rise. For example; the use of electronic collars on cows has rocketed from near zero in 2018 to over 23% of the national herd today.
The big difference in the New Zealand dairy industry when compared to Ireland that over 80% of the milk is processed through the farmer owned juggernaut co-operative that is Fronterra. This structure returns value to farmer shareholders just like the Kerry and Glanbia share spin outs at home. Is this the next step for the Irish dairy Industry, given the stagnation in milk volumes of milk produced?
20 years ago we in Ireland envied the New Zealand dairy industry, today we have well and truly caught up and in many area have surpassed it. As the only two grass-based exporting dairying nations on the planet it is now time to increasingly pool our knowledge and resources to ensure grass based dairy stays on the global consumers shopping list as a highly nutritious environmentally sustainable and affordable food.