New Zealand dairy feed consumption largely unchanged for a second year

March 10, 2021 - The dairy sector dominates New Zealand agriculture, and accounts for 75 percent of grain and feed consumption, according to the GAIN report published by the USDA.

In general, the diet of most cows on non-irrigated pasture (75-80 percent of total dairy area in New Zealand) would have 20 to 25 percent of the total in some form of supplement to pasture, including grain, corn or pasture silage, hay, forage crop, or vegetable/fruit waste. Approximately 50-60 percent of the supplementary feed purchased onto farms is imported.

The New Zealand milk supply grew around 4.8 percent per annum from 1990 to 2014. However, this supply growth has to some extent stalled, recording less than 1 percent annual growth between 2014 and 2020. Initially this was due to low milk prices (2015, 2016), but even as prices have risen, looming environmental regulations have caused considerable uncertainty in the sector.

The drought which covered much of New Zealand during January to May 2020 was particularly severe in the North Island. As the dry period dragged on it was expected that demand for imported feed would increase significantly. However imported grain and feed volumes were only up 36,000 MT (1 percent). For example, Palm Kernel Extract (PKE) is the dominant dairy supplementary feed, but PKE imports for MY2020 were only 6,000MT (0.35 percent) above MY2019 at 1.813 MMT.

The reason imports did not increase more was because dairy farmers began January 2020 with high pasture volumes and high levels of conserved feed. Essentially this extra on-farm pasture and conserved feed was almost all used up during the fall period (February to May 2020) rather than being stored for winter utilization (June to August). Despite farmers having to go into winter with less stored feed, weather over the winter was very mild and conducive for high pasture growth, which significantly reduced the volume of imported feed that was needed.

Although feed imports were somewhat subdued during these periods, they did bounce back in the spring (October to December), with distillers dried grains (DDGs) imports up 42 percent compared with the prior comparative period in 2019. PKE imports were also up 22 percent for the same period compared with 2019.