NZ dairy industry tipped to set records

NZ dairy production is to set another record this season. Photo / APN

New Zealand dairy production will set a record this season, says a US Department of Agriculture report.

The USDA Foreign Agricultural Service's dairy report forecasts 2012 industry milk production of 19 million tonnes, up nearly 2 per cent.

Raised production was expected to be supported by the entry of 80 to 100 new dairy farms, which would add an extra 110,000 cows, and by a trend for productivity gains per cow and hectare, the report said.

Environmental concerns and the imposition of tighter conditions on new farms and land-use changes were limiting additional growth in the industry, it said. "Without these additional costs and risks the rate of new farms being added to the sector could be up to double the present rate."

Several issues had the potential to change the sector over the next 12 to 18 months, the report said.

Any changes to Raw Milk Regulations, now under review, would affect new-processor access to raw milk from dairy co-operative Fonterra, while a proposal to allow Fonterra's farmer shareholders to trade shares among themselves would require legislative changes, it said.

Fonterra collected about 89 per cent of national milk production in 2009-10.

Fonterra's managing director for trade and operations, Gary Romano, last week said some of the best weather in years had resulted in a wave of milk arriving earlier than forecast.

Fonterra had been allowed to boost its loading limits and its tankers could collect an extra 1.2 million litres of milk a day for the next three months.