Article Summary: The global demand for dairy products has been rising, and the New Zealand dairy industry is on the firing line. While global demand is growing, New Zealand’s milk production forecast is set to fall slightly in 2023, with a slowly declining national herd. To ensure that NZ’s dairy industry can keep up with demand, production costs and reduced collective output, farmers must innovate and invest to ensure the future of their products, their herd, and their farms in the global market.




After a slow start to the 2022 season, milk production in New Zealand (and Australia) will slowly pick up despite the absence of a major Chinese buyer across global markets. But this won’t be enough to supply the world’s milk.

The global demand for dairy products has been rising, and the New Zealand dairy industry is on the firing line. New Zealand’s milk production forecast is set to fall slightly in 2023, with a slowly declining national herd.

It’s been a difficult time regarding milk production in Australia and NZ, not only from a weakening global economy and less demand from (and extended COVID lockdowns in) China but also due to widespread weather events and the war in Ukraine. 

So how can New Zealand keep up with this global demand for dairy while its’ production is set to fall even lower? We’ll look at the inevitable changes your farm must make to be future-proof and maximise your production levels. But first, let’s look at some data.

What does the data say?

According to Rabobank, New Zealand's milk production in August 2022 decreased by 4.9% on a milk solids basis, resulting in a 4.4% decrease season-to-date. They anticipate that in 2023, the full season's milk production will be lower than in previous years.

Data from the New Zealand Ministry for Primary Industries shows that the dairy industry is the country's largest export earner, contributing 22% of total export earnings. Additionally, Kiwi farmers are producing more milk per cow than ever, with production yields increasing by 14% over the last five years. This is largely due to the investments in technology and innovation, which have allowed them to increase production efficiency while reducing labour costs. But the reporting of dwindling herds means that increasingly empty, old or cull cows are still being supported at farm level and costing you money.

The data also shows that the industry is facing significant challenges due to the impact of climate change. Over the last five years, there has been a 10% decrease in production yields for certain dairy products due to changing weather patterns and increasing temperatures. The data clearly shows that the New Zealand dairy industry is facing significant challenges due to global demand and the impacts of climate change. However, the industry is adapting and finding new ways to remain competitive through investing in technology, innovation and research.

How can New Zealand cope with dairy supply and demand?

Reliance on foreign markets for dairy sales has meant that prices are subject to fluctuations in the global market, leading to periods of volatility for the industry. This has been further exacerbated by the impacts of climate change, which has caused a decrease in production yields for certain dairy products. To remain competitive, as a New Zealand farmer, you must continue to invest in technological innovation and research to ensure that your production output is of the highest quality and yield. 

This includes investing in new technology, such as robotic milking systems, which can increase efficiency and productivity while reducing labour costs. 

The NZ dairy industry must continue to focus on sustainability and reducing its environmental footprint to ensure that the industry can remain profitable and competitive in the global market. The New Zealand dairy industry faces numerous challenges, but the industry is adapting and finding new ways to stay competitive. By investing in technology, innovation and research, farms in NZ will ensure their product remains of the highest quality and capable of competing in (and satiating) the global market.

Examples of innovations in dairy currently in use across Kiwi dairy farms

New Zealand dairy farmers are no strangers to innovation. You, too, must start embracing new technologies to improve your dairy production and keep up with ever-increasing demand. 

Additionally, while it does require a financial investment, these systems save significant costs in the long run through saved labour, less empty or cull stock and greater production levels. In short, if you are yet to streamline your production using technology, now is the time to start planning for your farm’s future. 

From using software to track and monitor herds and manage pastures, ponds and other resources, it’s becoming more commonplace to have some form of automation on your property.

Computer-aided milking systems are being implemented to ensure cows are milked efficiently and quickly. Farmers are also using robotic milkers to detect when cows are ready to be milked, making the process more efficient. You can innovate and improve the quality of your product via automated feeding systems that ensure cows get the right type and amount of feed and automated temperature-controlled water systems that keep cows hydrated. These new technologies will enable you to manage your dairy production better and keep up with demand while maintaining the highest quality outputs.

  • Automated feeding systems provide flexibility and efficiency

  • Electronic ID systems take the time out of manual identification

  • Drafting systems handle complex or expanding herds

  • Robotic milking systems reduce physical labour demands, freeing up more time for management and quality control initiatives

  • Automated mastitis detection systems preserve animal wellbeing, milk quality and labour demands

  • Automatic heat detection helps identify cycling cows and maximise calving cycles and thus, productivity.

How to get help from dairy industry partners and experts

These innovations often require significant outlay, blueprints and building, but your dairy body can assist you in your plans with helpful resources available. 

In addition,'s central ethos supports you in making the best-informed grazing decisions so you can grow your farm sustainably. To find out more about our pasture management services to support farmers worldwide, set up your farm for free today or contact our team of friendly experts via our website.

However, the future is bright. With a noticeable uptake in these investments in additional resources and technologies at a farm level, the NZ dairy industry looks set to see higher export prices take shape this year. And suppose you, like many other NZ farmers, work to meet the increased production costs and quality assurance while demand for dairy increases; you’ll reap financial benefits on your farm, too.

- The Dedicated Team of, 2023-01-26