New Zealand's Dairy Industry

Enjoy these short, sharp facts about one of New Zealand’s major industries.

History of dairy in NZ

  • Introduced in 1814, our first dairy cows were Shorthorns known then as Durhams. They were useful draught animals which gave good milk and provided excellent meat. 
  • In the early days, butter was the only dairy product with a marketable value although it was often bartered with rather than sold for cash.
  • From the 1880s onwards refrigeration allowed our first exports.
  • The first dairy factories opened mid-1880s in Taranaki and Waikato. This is when Henry Reynolds developed the Anchor trademark. Mainly butter and cheese were processed here.
  • Dairy factories were often built along rail lines to aid transportation of products in refrigerated wagons.
  • Our dairy industry has been big on co-operatives since the beginning. By 1890, of the 150 factories nationwide, 40% were co-ops owned by farmers.

Herd numbers and production stats

Many of the following statistics cover the 2014/15 season and were put together by Dairy NZ. Find the full report here.

  • More than 5 million cows in NZ.
  • 419 is the average herd size.
  • Average herd size has tripled in the last 30 seasons and has increased by over 100 cows in the last 10 seasons. 
  • 5% of herds have over 1000 cows. 
    • 12% have 750 or more. 
    • 29% have 500 or more. 
    • A little over 50% have 100 to 349 cows.
  • 74% of dairy herds are located in the North Island accounting for 60% of dairy cows.
    • 26% of dairy herds accounting for 40% of dairy cows are located in the South Island.
  • 23% of all dairy cows are in the Waikato region, 13% in North Canterbury, 11% in Southland, 10% in Taranaki.
  • 21.3 billion litres of milk containing 1.89 billion kilograms of milksolids was produced in 2014/2015 (56% higher than ten years previously).
  • Average milksolids per cow – 377kg
  • Average milk production per hectare – 1082kg
  • Highest average milksolids per hectare in South Island – 1457kg (North Canterbury)
    • Highest average milksolids per hectare in North Island – 1124kg (Taranaki)
    • Highest average milksolids per cow in South Island – 416kg (North Canterbury)
    • Highest average milksolids per cow in North Island – 395kg (Taranaki and Manawatu)
  • Approximately 1.8 million hectares of land used for dairy farming.
  • Dairy is estimated to be three times more profitable per hectare than other pastoral land use.
  • New Zealand is the world’s eighth largest milk producer, with about 2.2% of world production. 
  • In 2013, 42% of dairy revenue came from whole milk powder.
    • Butter, AMF and cream products – 16%
    • Cheese – 12%
    • Skim milk powder – 14%
    • Casein, protein products, albumins – 12%
    • Other dairy products – 4%
  • 95% of all milk produced is processed for export.
  • Dairy season runs from 1 June to 31 May.
  • Fonterra is New Zealand’s largest dairy company, earning about 20% of NZ’s total export income, 7% of GDP.

 Dairy cattle breeds

  • 3 dominant breeds make up NZ’s dairy herd:
    • Holstein-Friesian/Jersey crossbreed – 45.6%
    • Holstein-Friesian – 34.7%
    • Jersey – 10.4%
    • Other – 9.2%
  • On average Holstein-Friesian cows produced a higher volume of milk; they also produced the highest protein and milksolids.
  • Jerseys have the highest milkfat and protein percentages.
  • For all breeds, 6 year old cows produced more milksolids than any other age group.

Types of farm structure

  • 67% of herds are run as owner-operators.
  • 32% of herds are operated under a sharemilking agreement, of which 53% are on a 50/50 agreement.

Owner operators are farmers who either own and operate their own farms, or who employ a manager to operate the farm for a fixed wage. Owner-operators receive all the farm income, although they may pay wages. 

Sharemilking has traditionally been the first step to farm ownership. It involves operating a farm on behalf of the owner for an agreed share of the profits as opposed to a set wage. 50/50 sharemilking agreements usually means the sharemilker owns the herd and any plant and equipment (other than the milking plant) needed to farm the property. They are responsible for milk harvesting expenses, all stock related expenses, and general farm work and maintenance.

A variable-order sharemilking agreement often sees the farm owner heavily involved in management, retaining ownership of the herd and bearing more of the farm costs. 

Contract milkers are contracted to milk a herd at a set price per kilogram of milksolids produced.