New Zealand’s pasture-based dairying system used to mark the country as the lowest-cost milk producing country in the world, but as the industry intensifies its farming practices the country is now ranking among the middle of producing countries for cost. Alternative feeds used to account for 10% of farms expenses, however today this cost has increased to 25%. Now price edge must be gotten through more efficient processing, strong export markets, and strong supply chains. As the field levels, New Zealand will see growing global competition especially for Asia’s growing markets. Interest costs have also risen because of high debt within the New Zealand industry – doubling in the past ten years to equal $20 per kilogram of milk solids produced. Environmental pressures upon farmers are also increasing costs as the weaker U.S. dollar has improved the competitiveness of that country in export markets.
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