By Mike Bain.

New Zealand dairy farmers are celebrating a record-breaking season, with high milk prices and increased production injecting billions into the rural economy.

Agriculture Minister Todd McClay announced on Tuesday that dairy exports contribute $4,700 per New Zealander, with the 2024/25 season adding an extra $4.5 billion in farmgate revenue.

“This is good news for farmers, rural towns, and our economy as a whole,” McClay said, highlighting the forecasted milk price of around $10 per kilogram of milk solids—the highest returns since 2021/22.

Federated Farmers welcomed the strong performance but urged caution.

Dairy Chair Richard McIntyre noted that while high prices are a relief, farmers still face rising costs, regulatory uncertainty, and environmental pressures.

“We need long-term stability, not just short-term gains,” he said.

Fonterra, New Zealand’s largest dairy processor, echoed the optimism.

A spokesperson emphasized that global demand for high-quality, grass-fed dairy remains strong, with new trade agreements opening doors to lucrative markets.

However, farmers have raised concerns about Fonterra’s restructuring, particularly the reduction in face-to-face support for suppliers.

The Government has introduced sweeping reforms to support the sector, including removing agriculture from the Emissions Trading Scheme, repealing the Ute Tax, and halting restrictive freshwater regulations. McClay stressed that these changes aim to restore confidence and ensure more value reaches farmers.

Despite the positive outlook, industry leaders warn that climate policies, banking pressures, and global market shifts could impact future profitability.

As dairy remains a cornerstone of New Zealand’s economy, farmers are calling for continued support and smart investment to sustain growth.