New Zealand milking cow numbers have dropped to the lowest level in four years, although the average cow is producing more milk than ever before.
The number of milking cows fell 2.7 per cent to 4.86 million in the 2016/17 season, the second consecutive annual decline and marking the lowest level since the 2012/13 season, according to the latest New Zealand Dairy Statistics 2016/17 report produced by DairyNZ, the industry body which collects data from farmers, and Livestock Improvement Corp, the dairy herd genetics cooperative.
Meanwhile, the average dairy cow produced 4,259 litres of milk containing a total of 381 kilograms of milk solids, up from 4,185 litres and 372/kgMS a year earlier, and the highest levels recorded since the data has been collected.
Dairy products are the country's largest commodity export worth $13.3 billion in the year through October, however, pressure is increasing on the industry amid concern about the impact of dairy intensification on the country's environment.
DairyNZ and LIC said the latest statistics were positive for New Zealand and its farmers and show that farmers are opting for animals that are more efficient at converting grass into milk.
"We are producing similar milk quantities from fewer cows, partly because we are breeding better animals and feeding them well," said DairyNZ senior economist Matthew Newman.
"The average herd is now 414 cows, down from 419 in 2015/16. Currently we are at the lowest level of cows milked since 2012 - with North Island cow numbers declining 90,000 to 2.89 million, while South Island numbers decreased 46,000 to 1.97 million."
Overall, dairy companies in New Zealand processed a similar quantity of milk over the past two seasons with a total 20.7 billion litres of milk containing 1.85 billion/kgMS in 2016/17, compared with 20.9 billion litres of milk containing 1.86 billion/kgMS in the previous season.
LIC general manager NZ markets Malcolm Ellis said the lower milk payouts from processors in previous seasons had forced some farmers to reconsider their cow numbers and focused their attention on developing better milking cows.
Fonterra Cooperative Group, New Zealand's dominant milk processor, expects to lift its farmgate milk price to its farmer shareholders for the current 2017/18 season to $6.75/kgMS, from $6.12/kgMS last season, and just $3.90/kgMS in the 2015/16 season and $4.40/kgMS in the 2014/15 season.
The dairy statistics show the South Island now produces 43.4 per cent of national milksolids, up from 35.6 per cent a decade ago.
Milk production in the South Island increased 1.2 per cent, with lifts in North Canterbury, Otago and Southland.
By contrast, North Island milk production slipped 1.9 per cent with all regions producing less milk except for Taupo, Taranaki which increased, and Manawatu which recorded no change.
Farm ownership structures have changed, with the report showing 27.3 per cent of New Zealand dairy herds operated under a sharemilking agreement in the 2016/17 season, down from 32.4 per cent in the 2014/15 season.