New Zealand’s dairy sector continues to perform strongly, with robust growth in dairy production at the start of the new season. Price expectations remain high, with the Fonterra forecast farmgate milk price at $10/kgMS. Based on this price, and current annual production trends, Infometrics estimates the national pay-out for the 2025/26 season to be around $19.4b, up around $36m from the season recently finished. We remain cautious about some moderation in prices, with high international prices likely to pull back somewhat as supply improves in other parts of the world. Our internal estimate suggests a $9.85/kgMS price, which could shave $971m off the overall pay-out. Feed levels are high, with record PKE imports over the year to June, costing around $700m.
Oct 2025 New Zealand’s dairy sector continues to perform strongly, By Mike Curragh
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