Dairy Export Revenue Hits Record $24.8B as Global Demand Surges
New Zealand dairy export revenue soared to a record $24.8 billion in the 2025-26 season, up 18% from the previous year, as strong Asian demand and strategic premium positioning offset earlier concerns about global price volatility. The surge marks the sector’s strongest performance since 2014, when similar demand spikes preceded a dramatic market correction.
- Dairy export revenue reached record $24.8 billion, up 18% year-on-year
- Asian markets drove 67% of total export value growth
- Fonterra’s GlobalDRI auction averaged $4,240/MT, highest since 2014
- Premium infant formula exports jumped 24% to $3.2 billion
- Industry warns current pricing may not be sustainable long-term
The latest Ministry for Primary Industries data shows dairy export values climbing steadily through the season, with whole milk powder averaging $4,240 per metric tonne at Fonterra’s GlobalDRI auctions. This represents the highest sustained pricing since the 2014 boom that preceded a sharp market downturn.
Key dairy export figures
“We’re seeing unprecedented demand from China’s post-pandemic recovery, coupled with supply constraints in Europe,” said Fonterra chief executive Miles Hurrell. “But we’re mindful that these conditions won’t last forever.”
Asian markets absorbed 67% of New Zealand’s total dairy export value growth, with China alone accounting for $8.4 billion in purchases. Premium infant formula exports surged 24% to $3.2 billion, reflecting continued consumer preference for New Zealand-branded products despite higher prices.
Warning signs emerge
Industry analysts are drawing parallels to 2014, when similar demand spikes and record pricing preceded a 50% market correction over 18 months. According to Productivity Commission research, the finding showed that rapid price increases typically trigger supply responses from competitors within 24 months.
“The current pricing environment is creating exactly the conditions that historically lead to oversupply,” warned ANZ agricultural economist Susan Kilsby. “European and US producers are already ramping up production in response to these price signals.”
Fonterra shares have gained 34% since January, reaching $8.20, but volatility remains high with daily swings of 3-4% common. The cooperative’s board maintained its farmgate milk price forecast at $9.50 per kilogram of milk solids, citing “market uncertainty ahead”.
Regional dairy processors reported mixed results, with Synlait posting a 15% revenue increase while Westland Milk struggled with margin pressure from higher input costs. Labour shortages continue affecting production capacity, with 2,800 unfilled positions across the sector.
Sustainability premiums take hold
Environmental compliance costs are reshaping profit margins, with emissions reduction requirements adding an estimated $0.40 per kilogram of milk solids to production costs. However, sustainability-certified products are commanding 12-15% price premiums in key European markets.
“The regulatory burden is real, but so is the market reward for meeting those standards,” said DairyNZ chief executive Campbell Parker. “Forward-thinking farmers are already seeing returns on their environmental investments.”
Currency headwinds remain a concern, with the New Zealand dollar strengthening 8% against major trading partners since December. Treasury forecasts suggest further appreciation could trim export values by $1.2-1.8 billion if current trends continue.
The sector employs 46,000 people directly and supports an estimated 160,000 jobs across rural communities. Export volumes increased 6% year-on-year, suggesting the revenue gains reflect genuine market strength rather than purely price-driven effects.
