Record dairy season overshadowed by rising cost pressure
Dairy season opens with softer prices at GDT auction
Government backs new plan to eliminate Bovine TB by 2040
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Record dairy season overshadowed by rising cost pressure
New Zealand dairy farmers are entering the new season from a position of strength — but rising costs driven by the Strait of Hormuz disruption are increasingly eating into that advantage.
DairyNZ's annual economic survey confirms the 2024-25 season was one of the strongest in a decade, with higher milk prices, increased production and reduced debt. The just-concluded 2025-26 season has delivered further records — national milk solids are set to exceed two billion kilograms for the first time, and the milk price has stayed above nine dollars for a second consecutive season.
But DairyNZ Head of Economics Mark Storey says the outlook for 2026-27 has shifted materially since March. The Strait of Hormuz disruption is no longer a distant watchpoint — it's at the farm gate, feeding through fuel, fertiliser, feed and freight costs right now.
Under DairyNZ's expected recovery scenario, the breakeven milk price rises to eight-seventy-nine per kilogram of milk solids. Storey warns spring will be the pressure point, with fertiliser, fuel and feed decisions all landing in the same August to November window.
Dairy season opens with softer prices at GDT auction
Meanwhile the new dairy season has started on the back foot, with whole milk powder prices dropping at the overnight Global Dairy Trade auction — a disappointing opening result for New Zealand farmers.
The overall GDT index fell point-six percent. Whole milk powder, the key driver of New Zealand farmgate payouts, dropped two-point-two percent while skim milk powder fell three percent.
Milk fats were the bright spot — anhydrous milk fat lifted five-point-three percent, butter rose one-point-two percent and buttermilk powder gained three percent.
Cheddar also lifted one-point-eight percent despite Fonterra increasing offered volumes ahead of the event.
Government backs new plan to eliminate Bovine TB by 2040
New Zealand has a renewed plan to eradicate bovine tuberculosis from livestock by 2040, with the Government and beef, dairy and deer industries targeting infected possum populations in hotspot areas of the central North Island and Otago.
Biosecurity Minister Andrew Hoggard says an independent review of the National Pest Management Plan confirmed that clearing TB-infected possums from those specific areas is the final step needed to permanently protect New Zealand herds. With just sixteen infected herds remaining nationwide, Hoggard says the country is close to the finish line after decades of work.
Funding stays at sixty million dollars a year for five years, split sixty percent from farmers and forty percent from the Government. A progress review will determine ongoing funding requirements beyond 2031.
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New Zealand