New Zealand’s dairy sector has hit a fresh milestone, with milk production setting a new August record.
Data from the Dairy Companies Association showed milk collections across the motu rose 2.5 per cent year-on-year, reaching nearly 127 million kilograms of milk solids last month. It marked the fourth consecutive monthly record, putting the 2025/26 season to date 4.2 per cent ahead of last year, Stephanie Ockhuysen & Monique Steele of RNZ reported.
The boost has been driven by buoyant milk prices, affordable feed, and stronger-than-average pasture growth, despite rising input costs such as fertiliser. Waikato and Taranaki led the gains, while South Island growth was more subdued.
The NZX Milk Production Predictor has forecast another rise in September, anticipating a 1.3 percent lift in milk solids, again led by Waikato and Taranaki.
According to a report by Stephanie Ockhuysen & Monique Steele of RNZ, DairyNZ has updated its breakeven milk price for the new season to $8.66/kgMS, up from $8.45 last season. Against this, forecast farmgate milk prices remain strong: $10/kgMS for Fonterra and Synlait, and $9.85/kgMS for Miraka.
DairyNZ head of economics Mark Storey said the outlook for farmers was solid, with electricity and freight costs still rising but interest rates easing, reported Stephanie Ockhuysen & Monique Steele of RNZ
“It’s certainly a strong position. We were thinking back even a couple of years ago, we said anything with an eight in front of it for power prices was great, and now we’re getting a payout in excess of $10,” he said, Stephanie Ockhuysen & Monique Steele of RNZ reported.
“With that kind of forecast, a lot of farms are in a good profit situation, albeit having to keep an eye on those costs. It’s definitely an attractive sector to be in, in terms of profitability,” RNZ reported.
Storey said farm working expenses edged up to $5.91/kgMS, reflecting ongoing cost pressures. StatsNZ figures for the June quarter showed the highest farm spend was on insurance premiums, followed by dairy sheds and electricity.
The sharpest year-on-year increases were in livestock purchases (up 18%) and electricity (up 11%), while the largest fall was in interest rates (down 19%), reported Stephanie Ockhuysen & Monique Steele of RNZ.
Storey noted that while input prices were “stubbornly” high, strong milk payouts were keeping the sector resilient.
“Our advice to farmers is you can only control what you can control, things like input costs and pasture growth. And overall, there’s reason to be continually optimistic,” as quoted by RNZ.
Last season (2024/25), both Synlait and Fonterra nudged up their farmgate prices through the year. Final payouts are due this week, with Fonterra set to confirm its final price on Thursday and Synlait on Monday.
For 2024/25, Fonterra’s forecast midpoint stands at $10.15/kgMS, Synlait at $10, and Miraka at $9.60.
With strong milk collections continuing into spring and farmgate prices holding up, analysts expect New Zealand’s dairy industry to remain on a steady footing heading into the peak of the 2025/26 season.