Employment trends in dairy farming in New Zealand, 1991 - 2006

Abstract

Today agriculture overall is New Zealand’s largest export earner. In the year to June 2007 dairy exports alone were 25% of total merchandise export value. These were produced by 3.8 million cows in 11,883 herds (Livestock Improvement, 2006). Dairy export value in 2007 was $NZ 8.41 billion, which is projected to increase to $NZ 11.68 billion in 2011 as a result of higher volumes and prices (Ministry of Agriculture and Forestry, 2007a). Most milk is consumed in the country of production. Only 5 percent of New Zealand milk is consumed in New Zealand, with the remainder exported as various milk products. Some 97 percent of New Zealand milk is processed by Fonterra, the farmers’ dairy cooperative company. Fonterra is also New Zealand’s largest company employing some 17,400 staff worldwide and it is the sixth largest international dairy company. However, it only handles some 3 percent of world dairy production, which is sourced from New Zealand (Fonterra, 2007). The prospects for dairy production are good at present as world prices are at all time high levels. The European Union has been able to export dairy products without the need for export subsidies for the very first time since its creation fifty years ago. However, future prospects, while looking good, are still quite uncertain if the production potential of a number of large countries (e.g. China, USA, Russia and those of Eastern Europe) is focused on milk production (Woodford, 2007). Sustaining New Zealand milk production and productivity therefore has vital importance for the overall state of the economy.