Milk flows in 2015-16, despite low prices

MEDIA RELEASE
Monday, 14 November 2016

Milk flows in 2015-16, despite low prices

In a year which saw the lowest milk prices in at least 20 seasons, milk production declined just 1.5 percent, according to the New Zealand Dairy Statistics 2015-16 released today by DairyNZ and LIC.

Milk production for 2015-16 eased slightly despite 52 fewer herds and 20,522 less cows than in 2014-15.

In total, dairy companies processed 20.9 billion litres of milk containing 1.86 billion kilograms of milksolids (kg MS) in 2015-16. This compares to 21.2 billion litres of milk (1.89 billion kg MS) the previous season.

“The average kilograms of milksolids produced per cow has gradually increased over the last 15 years and enables our industry to maintain high production year-on-year,” says Matthew Newman, DairyNZ senior economist.

“On average, each cow produced 373kg MS last season – very near the 2014-15 record of 377kg MS and still above the 2013-14 production of 371kg MS. On average last season, each cow produced 4185 litres of milk.”

LIC NZ markets general manager Malcolm Ellis says genetics and feeding these animals well ensures continual improvement in milking productivity of New Zealand dairy cows.

Milk production in the South Island increased 2.0 percent in 2015-16, with increases in both Marlborough-Canterbury (+2.5%) and Otago-Southland (+2.0%), while milk production in West Coast-Tasman eased (-0.8%).

“The South Island now produces 42.7 percent of national milksolids production, compared with only 31.1 percent a decade ago,” says Matthew.

North Island milk production declined 3.9 percent in 2015-16, with all regions except Northland (which had no change) producing less milk compared with 2014-15.

Taranaki (-8.3%) and the Lower North Island (-5.4%) recorded the largest declines from 2014-15.

Overall herd numbers fell for the first time since 2007-08, now totalling 11,918. North Island herd numbers declined 122 to 8696, while South Island herds increased 70 herds to 3222.

Shift in ownership structures

Farm ownership structures are also changing, with 30.0 percent of New Zealand dairy herds operating under a sharemilking agreement in 2015-16, compared with 32.4 percent in 2014-15.

Within the sharemilker herds, variable order sharemilking herd numbers declined in 2015-16. In particular, 20-29 percent sharemilkers decreased by 229 herds (-22 percent) to 821. Herd-owning sharemilkers (50:50 sharemilkers) declined 57 herds (-2 percent) to 2422.

Owner-operator herds increased 256 to 8315 herds in 2015-16, reflecting variable order sharemilkers moving to contract milking agreements after financial challenges with low milk prices in recent seasons.

“The number of cows milked in 2015-16 declined 0.4 percent to just under 5 million (4.998 million), despite a very high number of culled cows during the last two seasons. This reflects a high number of replacement heifers entering the milking herd in 2015-16, plus some carry over cows being culled. A further decline in the number of cows milked is expected this season,” says Matthew.

Breeding and herd improvement

Changes in dairy breeds continue, with Holstein-Friesian/Jersey cross-breeds now comprising 47.2 percent of cows compared to 45.6 percent in 2014-15.

Holstein-Friesians now make up 33.5 percent of the national herd compared to 34.7 percent in 2014-15, and Jerseys comprise 10.1 percent compared to 10.4 percent the previous season.

71.1 percent of cows were mated by artificial insemination (AI) in 2015-16, down 102,467 (-3%) on the previous season. In addition, the number of yearling heifers mated to AI declined 57,111 (-26%) to 163,864. This is the lowest number of heifers mated with AI since 2010-11.

Malcolm says this is a result of farmers being more cautious in the lower milk price environment. “However, farmers understand the value of herd improvement and the expectation is for activity to rebound in line with the milk price.”

The average six-week in-calf rate eased from 66.8 percent in 2014-15 to 66.5 percent in 2015-16. Over the past five seasons the national six-week in-calf rate has remained relatively steady at around 67 percent.

Herd testing undertaken was the lowest level on record at 61.4 percent, down from 72.9 percent in the previous season, as farmers reduced costs.

“Early indications for the 2016-17 season are that herd testing is ahead of the previous season. A number of farmers who put herd testing on hold in 2015-16 are coming straight back to herd testing because they want the valuable information it provides,” says Malcolm.

The number of tuberculosis (Tb) dairy herds declined two to 26 herds in 2015-16. However, the number of Tb dairy cows (including lesioned reactor cattle and lesioned cull cattle) decreased significantly from 120 in 2014-15 to only 27 cows in 2015-16.

For a copy of the New Zealand Dairy Statistics 2015-16 and to view updated regional QuickStats summaries, visit www.dairynz.co.nz/dairystatistics.

2015-16 regional dairy statistics

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