Arabfields, Nadia Aïssa, Correspondent, Wellington, New Zealand — New Zealand’s dairy industry has reached a historic production milestone, generating more than 2 billion kilograms of milk solids during the 2025/2026 season, as improvements in herd productivity and breeding performance continue to strengthen the country’s position in global dairy markets.
The latest figures, compiled by DairyNZ and Livestock Improvement Corporation (LIC), show that national milk production reached approximately 21.8 billion litres, representing a 3.5% increase compared with the previous season. Total milk solids rose by 4.5% to 2.02 billion kilograms, marking the first time the industry has exceeded the two-billion-kilogram threshold.
The expansion comes despite only modest growth in the national dairy herd. New Zealand had approximately 4.72 million dairy cows during the season, an increase of 1% year on year. Meanwhile, the number of operating dairy herds declined by 102 to 10,268, indicating a gradual consolidation of farming operations.
For dairy farmers, the figures reflect years of investment in genetics, animal health and more efficient production systems. Rather than relying exclusively on increasing herd sizes, producers are generating more milk from existing animals through improved breeding and farm management.
Average production reached 428 kilograms of milk solids per cow, up from the previous season’s record of 414 kilograms. This improvement highlights the growing importance of productivity as farmers seek to control operating costs while maintaining competitive output.
Milk composition has also improved significantly. Milk solids accounted for 9.27% of total milk volume in 2025/2026, compared with 8.48% in 2000/2001. The higher concentration of milk fat and protein increases the commercial value of each litre and improves processing efficiency.
The changes are particularly important for an export-oriented industry such as New Zealand’s, where dairy products are sold to international customers in the form of whole milk powder, skimmed milk powder, butter and cheese.
The average dairy payout reached NZ$10.44 per kilogram of milk solids during the 2025/2026 season. Although this was below the NZ$10.75 recorded in the previous season, it remained above the five-year average of NZ$9.67.
Behind the national figures are thousands of farming businesses operating under different ownership and management arrangements. Owner-operators accounted for 54.6% of dairy farms, while sharemilking represented 28.4% and contract milking accounted for 14.6%.
Farm sizes also vary considerably. The average herd contained 460 cows, but more than half of New Zealand’s dairy farms operated with fewer than 400 animals. At the other end of the scale, 6% of herds contained more than 1,000 cows.
The North Island remained the main centre of dairy farming, accounting for approximately 70% of all herds. However, the South Island, which hosts 30% of the country’s dairy herds, accounted for 43% of the national cow population, reflecting its generally larger farming operations.
Genetic improvement has been another important contributor to the production record. During the 2025/2026 season, approximately 84.8% of dairy cows were bred through artificial insemination, the highest proportion in three decades. More than four million cows were included in artificial breeding programmes.
The adoption of herd testing has also increased, with 83.3% of cows and 78.7% of dairy herds participating in testing programmes. These systems allow farmers to monitor milk production, reproductive performance and animal health more accurately.
Reproductive results have improved alongside these developments. The six-week in-calf rate reached a record 70.2%, compared with 63.5% in 2008. Meanwhile, the national somatic cell count fell to a record low of 149,000 cells per millilitre, indicating improvements in udder health and milk quality.
For farmers, better reproductive performance can reduce replacement costs and improve the long-term efficiency of dairy operations. More accurate genetic selection also allows producers to develop herds suited to New Zealand’s pasture-based farming systems.
Looking ahead, the country’s dairy industry is expected to focus increasingly on productivity rather than substantial herd expansion. Continued investment in breeding technology, animal health and farm management could help sustain production growth, although weather conditions and input costs will remain important variables.
Early indicators for the 2026/2027 season have been encouraging, but the pace of expansion is showing signs of moderation. September milk production growth slowed to 1.9% compared with the same month in 2025, while seasonal collection growth stood at 2.9% by the latest available industry update.
The prospect of El Niño conditions could introduce additional uncertainty, particularly if reduced rainfall affects pasture growth during the summer months. Farmers may then need to increase supplementary feed purchases, adding pressure to production costs.
Global demand will also influence the sector’s performance. New Zealand remains heavily dependent on international dairy markets, particularly in Asia, where demand for milk powders and other dairy ingredients can significantly influence export revenues.
For the country’s producers, the challenge will be to maintain the productivity gains achieved in recent years while managing changing weather patterns, operating expenses and international price fluctuations.
The latest production record demonstrates that New Zealand’s dairy industry is becoming increasingly efficient. Whether this momentum can be maintained will depend on the ability of farmers to combine genetic progress, sound herd management and sustainable production practices as the next season unfolds.
