Dairying’s contribution to the New Zealand economy

Dairying receives its fair share of negativity from certain sectors of the community but it is important to note the huge contribution that it makes to the New Zealand economy and the number of people whose livelihoods depend on its success.

Figures released by the New Zealand Institute of Economic Research in 2017 show that:

• Dairy contributes $7.8 billion to New Zealand’s total GDP
• This figure is made up of dairy farming ($5.96 billion) and dairy processing ($1.88 billion)

Dairying remains New Zealand’s largest export sector averaging $14.4 billion for the last five years. It accounts for more than a quarter of all goods export dollars coming into New Zealand and exports twice as much as the meat sector, almost four times as much as the wood and wood products sector and nine times more than the wine sector.

Provides jobs to over 40,000 workers with 27,500 of those on a farm and a further 13,000 in dairy processing. These workers were paid $2.4 billion in wages in 2016, with dairy farming’s average wage being $46,640 and dairy processing $72,910.

Regionally the dairying sector accounts for 14.8% of Southlands economy, 11.5% of the West Coast’s, 10.9% of the Waikato’s, 8.0% of Taranaki’s and 6.0% of Northland’s economy. 

The financial benefits flow through to other sectors of the economy with farmers in 2016 spending:

• $914 million on agricultural services
• $711 million on fertilisers and agrochemicals
• $432 million on financial services
• $393 million on forage crops
• $197 million on accounting and tax services
• Over $190 million on agricultural equipment.

The dairy processing sector also spent significant amounts on packaging ($288 million in 2016), hired equipment ($199 million) and plastics ($174 million).

They also invested over $2 billion in significant capital investments over the last four years.

DairyNZ estimates that farmers have spent over $1 billion in recent years on environmental management systems such as effluent systems, riparian planting and retiring sensitive land, or about $90,000 per dairy farm. This is a significant, and often overlooked, the investment made by dairy farmers throughout New Zealand.