Fewer cows, less milk, but productivity up in 2016

On average last season, each cow produced 4185 litres of milk.

Despite New Zealand dairy farmers receiving the lowest milk prices in 20 seasons, milk production dropped just 1.5%.

That was one of the New Zealand Dairy Statistics 2015-16 released on November 14 by DairyNZ and LIC. They revealed there were 52 fewer herds and 20,522 fewer cows than in 2014-15.

Dairy companies processed 20.9 billion litres of milk containing 1.86 billion kilograms of milk solids in 2015-16. The previous season, they handled 21.2 billion litres of milk, with 1.89 billion kilograms of milk solids.

"The average kilograms of milk solids produced per cow has gradually increased over the last 15 years and enables our industry to maintain high production year-on-year," DairyNZ senior economist Matthew Newman said.

"On average, each cow produced 373kg of milk solids last season - very near the 2014-15 record of 377kg and still above the 2013-14 production of 371kg. On average last season, each cow produced 4185 litres of milk."

Genetics and good feeding ensured continual improvement in the nation's cows' milking productivity, LIC New Zealand markets general manager Malcolm Ellis said.

In the South Island, milk production rose 2% in 2015-16. Marlborough-Canterbury's increase was 2.5% and Otago-Southland's 2%, while West Coast-Tasman fell 0.8%.

"The South Island now produces 42.7% of national milk solids production, compared with only 31.1% a decade ago," Mr Ellis said.

North Island production fell 3.9% in 2015-16, with all regions except Northland (which had no change) producing less milk than in 2014-15.

Overall herd numbers fell for the first time since 2007-08, now totalling 11,918. North Island herd numbers declined 122 to 8696, while South Island herds increased 70 herds to 3222.

Farm ownership structures also changed - 30.0% of New Zealand dairy herds operated under a sharemilking agreement in 2015-16, compared with 32.4% the previous season.

Within the sharemilker herds, 20-29% sharemilkers decreased by 229 herds (-22%) to 821 and 50:50 sharemilkers declined by 57 herds (-2%) to 2422. Owner-operator herds increased 256 to 8315 herds in 2015-16, reflecting variable order sharemilkers moving to contract milking agreements after financial challenges with low milk prices in recent seasons.

"The number of cows milked in 2015-16 declined 0.4% to just under 5 million, despite a very high number of culled cows during the last two seasons," Mr Newman said.

"This reflects a high number of replacement heifers entering the milking herd in 2015-16, plus some carryover cows being culled. A further decline in the number of cows milked is expected this season."

Holstein-Friesian/Jersey crossbreeds now account for 47.2% of cows - up from 45.6% in 2014-15. Holstein-Friesians make up 33.5% of the national herd, compared to 34.7% in 2014-15, and Jerseys comprise 10.1% compared to 10.4% the previous season.

Artificial insemination was used on 71.1% of cows in 2015-16, a 3% drop on 2014-15. The number of yearling heifers mated through AI also declined by 26% - the lowest number since 2010-11.

"However, farmers understand the value of herd improvement and the expectation is for activity to rebound in line with the milk price," Mr Ellis said.

The average six-week in-calf rate eased from 66.8% in 2014-15 to 66.5%. In the past five seasons the national six-week in-calf rate has remained relatively steady at around 67%.

Herd testing was at the lowest level on record at 61.4%, down from 72.9% as farmers cut costs.