New Zealand: Dairy and Products Annual

New Zealand fluid milk production for market year (MY) 2027 is forecast at 21.9 million metric tons (MMT), down 3.5 percent from a record 22.7 MMT in MY 2026. A strong El Niño and higher input costs are expected to reduce output. Farmgate milk prices remain above breakeven, which should support continued supplementary feeding. Whole milk powder (WMP) production is expected to absorb most of the decline, while processors reach record cheese and butter output. New Zealand's dairy export volumes rose 7 percent from January to September 2026. In 2027, cheese, butter, skim milk powder and specialty milk product exports are anticipated to stay strong, despite lower production. China remains the largest market at roughly 40 percent of export volumes. The upcoming November 7 general election along with a review and possible reform of the Dairy Industry Restructuring Act are delivering policy uncertainty for the sector.