NZ milk output hits record but costs cloud outlook
Middle East conflict and El Niño seen slowing growth ahead
23 June 2026
1 minute read
By: New Zealand's milk collections rose 5% in May to 108.7 million kilograms of milk solids, while milk production rose 3.6% to 1 million metric tons, Reuters reported, citing data from the Dairy Companies Association of New Zealand.
The full 2025-26 season result reached 2.03 billion kilograms of milk solids, up 4.5% on the prior season and 4.1% above the previous record set in 2020-21, NZX said.
"Milk production growth over the past two seasons has reflected a change from an industry largely in consolidation mode, back into expansion," NZX said, pointing to stronger global dairy commodity prices alongside lower input costs and favourable weather conditions.
However, NZX warned that rising costs of fuel, fertiliser, feed and freight linked to the Middle East conflict and disruptions to the Strait of Hormuz are expected to slow growth in the coming months. It anticipates June milk production to decline around 3.3% and ease between 0.1% and 1% for July to September.
"The prediction of a 'super' El Niño conditions is another key development with global modelling anticipating a strong weather event," NZX added.
