For the Kiwi's, dairy is big business. So big that dairy product exports account for $1 of every $4 of the nation's total exports. Yes, 25 percent of all goods sold by New Zealand originated from dairy cows.
For the fiscal year that ended in late June, it's projected that New Zealand and its Fonterra Cooperative, which controls 95 percent of the nation's dairy market, sold $17.6 billion of dairy products abroad. That's a 31 percent gain over the prior year due largely to the higher product prices we also experienced stateside. Meanwhile, total milk solids (how New Zealand tracks milk production) rose 9.5 percent during the past year.
As for the coming season, the Ministry for Primary Industries estimates milk flow will go up 2.3 percent as cow numbers reach 5.1 million head. Even so milk revenue could be off 10.1 percent as world production meets consumer demand. That said, the Kiwi government expects its nation to sell roughly $15.8 billion of dairy products to international customers.
China has been a big growth market for New Zealand. In 2001, the Kiwis sold a mere $200 million of dairy products to China. In the most recent season, that number grew to $6.1 billion and New Zealand garnered 35 percent market share of sales into the world's most populated country. This substantial growth in trade was greatly aided by a free trade agreement inked between China and New Zealand in October 2008. That agreement gradually eliminated tariffs and helped New Zealand garner a dominant market share.
