Inside Milk
New Zealand ends 2020 with slightly higher production
New Zealand dairy farmers have closed the year 2020 well. Milk production in December is at the highest level since 2016. This also means that the total production for the calendar year is higher than the year before. There are also good prospects, because the government of New Zealand recently extended the free trade agreement with China.
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For the month of December, New Zealand dairy processors collected 2.741 million tonnes of milk, which is approximately 6,8% less than in november. Compared to the same month in 2019, an increase of 0,7% is visible, when production in December amounted to 2.722 million tons. Dairy farmers in New Zealand have also made significant progress compared to previous seasons. Milk production in December has not been this high since 2016.
2020 ended slightly higher
Now that the figures for the month of December are known, the balance sheet for calendar year 2020 can be drawn up. The total milk supply amounts to 21.871 million tons, which is an increase of about 0,3% compared to the previous calendar year. In 2019, New Zealand milk production amounted to 21.786 million tonnes. Production is also higher than in the calendar years 2016 and 2017. Compared to the year 2018, a small minus of approximately 0,3% is visible.
The most profit (in terms of milk supply) was achieved in May and August last year. Milk production then amounted to 905 million tons and 1.468 million tons respectively, significantly higher than in previous years. On the other hand, dairy workers collected significantly less in the months of March and November than in previous years. All in all, it ensures that milk production in New Zealand has been fairly stable since 2016.
Free trade agreement with China extended
Although the first figures for 2021 are not yet known, New Zealand dairy farmers are starting the year off well. The government announced this week that the free trade agreement with China has been extended. This means that New Zealand exports will have better access to the world's second largest economy. China is currently New Zealand's largest trading partner, with annual trade of over $21,58 billion.
For many dairy farmers, the good news is that the existing conditions for dairy will be maintained. In addition, the safeguard measures for most dairy products will be abolished within 1 year (and for milk powder within 3 years). This means that by January 1, 2024, New Zealand dairy exports to China will be completely tariff-free.