Global dairy markets firm amid supply uncertainty and New Zealand production shifts

Global dairy markets are showing strength into September, driven by sustained demand for milk proteins. In New Zealand, milk collections reached a record 30.35 million kgMS in July, a 7.9% year-on-year increase. While production is currently strong, analysts are monitoring potential risks from El Niño and heatwaves in the northern hemisphere, which could impact future supply.

Global production trends are diverging: July saw increases in Argentina (3.2%), Uruguay (11.4%), and the United States (2.2%), while China's production fell by 2.9%.

In New Zealand's livestock sector, there is a growing trend toward dairy beef production. Farmers are increasingly using beef genetics to improve the value of surplus or non-replacement calves. Dairy-beef breeding now accounts for approximately 12% of matings, as producers seek to improve growth rates and carcass performance to capture additional income.