NZ milk output forecast at record 22.1MMT in 2026
Strong farm-gate prices prompt farmers to retain cows
18 June 2026
1 minute read
By: New Zealand's milk production is forecast to reach a record 22.1 million metric tons in marketing year 2026, driven by strong farm-gate prices and growing investment in the sector, according to a recent USDA Foreign Agricultural Service dairy report.
The current average farm-gate milk price stands at NZ$9.70 (US$5.72) per kilogram of milk solids, with forecasts pointing to prices remaining in the NZ$9 to NZ$11 range (US$5.31 to US$6.49), well above the average break-even price of NZ$8.36 (US$4.93) as reported by DairyNZ. The favourable margins are encouraging farmers to maintain and expand production and are supporting new dairy farm conversions in select regions.
FAS/Wellington forecasts cows in milk will increase 1% in MY 2026 to 4.72 million head, above the USDA official figure. Higher farm-gate prices have incentivised farmers to retain more cows rather than cull them for slaughter, a trend expected to continue into 2027. Herd expansion is also being driven by cropland-to-dairy conversions on the South Island and parts of the North Island, projected to add 30,000 to 60,000 head to the national herd.
Dairy cow slaughter is forecast to continue trending down in MY 2026, with first-quarter 2026 slaughter running 66,000 head below the same period a year earlier. FAS noted that reduced dairy cow slaughter will result in lower beef production, as culled dairy cows account for a large share of grinding beef volumes.
