New Zealand’s dairy industry is built around a relatively small number of seasonal pasture-based herds with a dairy processing sector that is strongly focused on producing high-value products for international markets. As of June 2025, the national herd comprised 4.68 million milking cows across 10,370 herds, with an average herd size of 451 milking cows per herd. Together, these herds produced approximately 21 billion litres of milk, around 95% of which was exported as dairy products and generated export earnings of about NZ$27 billion. Overall, the dairy industry accounted for roughly 30% of New Zealand’s total merchandise export value and employed approximately 49,000 people.
It is difficult for New Zealand dairy systems to compete with intensive overseas systems on milk volume alone. Instead, value is maximised through the production of fat and protein, which underpin New Zealand’s export-focused commodity products such as whole and skim milk powder, butter, anhydrous milk fat (AMF), and cheese.
Consequently, production is measured as kilograms of milksolids (kgMS) rather than by volume (litres) or weight (hundredweight, cwt). This metric also aligns better with pasture-based, seasonal systems where both milk volume and composition fluctuate across lactation, with higher fat and protein levels often seen in early and late season milk.
Using kgMS therefore provides a more meaningful basis for benchmarking herd performance, evaluating genetic merit, assessing feed conversion efficiency and making fair comparisons across breeds such as Jerseys and Holstein-Friesians that differ markedly in milk volume but not necessarily in economic value.
Most New Zealand dairy farms supply their milk under contract to one of a small number of major dairy processors, which collect, process, and market milk and dairy products in New Zealand and overseas. The sector is dominated by Fonterra Co-operative Group, a farmer-owned co-operative that accounts for approximately 78% of total milk production, alongside a group of independent processors including Open Country, Synlait, a2 Milk, Westland Milk Products, Miraka, Tatua Co-operative Dairy Company, and Oceania Dairy.
Farmers typically enter into seasonal or multi-year supply contracts that set out milk collection arrangements, quality standards, and pricing frameworks, and in some cases require shareholding or supply commitments. In 2025, the average dairy co-operative payout was $10.75 per kgMS meaning that each cow generated an average of $4,300 in profit during the season.
New Zealand dairy farms operate under one of three primary ownership and management structures. The majority of farms (55%) are owner-operated, where the farmer owns the cows, land, and infrastructure and also manages the day-to-day operations of the herd. Around 29% of farms are run under sharemilking arrangements, where the farm owner retains ownership of the land and infrastructure, while the sharemilker owns the cows and manages day-to-day operations in return for an agreed share of the milk income, most commonly a 50:50 split. The remaining 16% of farms operate under contract milking, where the contractor manages the milking operation for an agreed fee but does not own the cows, land, or infrastructure. In addition, many farms employ additional farm managers and farm staff who are paid wages or salaries to run or support operations on behalf of the owner, shareholder, and/or contractor.
The majority of dairy herds in New Zealand (approximately 85%) operate seasonal spring-calving systems, with most calves born from July to September in the North Island and from August to October in the South Island. This timing is designed to align peak pasture growth with peak milk production in predominantly pasture-based farming systems. A small proportion of herds (approximately 3%) practice autumn calving, with calving occurring from March to May, primarily to take advantage of higher milk prices when national supply is low. The remaining herds (approximately 12%) operate split-calving systems, in which part of the herd calves in spring and part in autumn to spread milk supply, labour demands, and production risk across the year.
Consistent with the strongly seasonal nature of production and contracting, New Zealand’s dairy industry is organised around an annual dairy season rather than the traditional calendar year. Each season runs from 1 June to 31 May the following year to align with milk supply, farm reporting, and sharemilking and contract milking agreements. For example, the 2024/2025 season ran from 1 June 2024 to 31 May 2025. The first day, 1 June, is known as “Moving Day” or “Gypsy Day” because this is often when sharemilkers, contract milkers, farm staff, and their families move between farms as new contracts begin, which may involve the relocation of entire dairy herds and their associated equipment. This practice has been highlighted as a potential national biosecurity risk for distributing pathogens and pests across the country.
2. Herd Demographics
Advancing Animal Care through Shared Learning