This was also despite a rise in other input costs, such as fertiliser.
Waikato and Taranaki led the gains, while growth in the South Island was more subdued.
The NZX Milk Production Predictor anticipated a 1.3% increase in milksolids for September, with Waikato and Taranaki leading the way again.
Dairy farmers are expected to milk the profits from the continued high production this season, as good prices help offset rising farm costs.
Industry group DairyNZ updated its breakeven milk price for this new season (2025/26) to $8.66 a kilogram of milk solids, up from $8.45 last season (2024/25).
That was levelled against forecast farmgate milk prices midpoints for the new season of $10 a kilo of milk solids for Fonterra, a base $10 a kilo of milk solids for Synlait and $9.85 for Miraka in Taupō.
The industry group’s head of economics, Mark Storey, said electricity and freight costs farmers faced continued to increase, while interest rates had fallen.
He said it was steady as she goes for dairy farmers this new season.
“It’s certainly a strong position. We were thinking back to even a couple of years ago, we said anything with an eight in front of that for the power prices was great, and now we’re getting a payout in excess of $10.
“So with that kind of forecast, a lot of farms are in a good profit situation, albeit having to keep an eye on those costs.
“It’s definitely an attractive sector to be in in terms of its profitability.”
The industry group’s breakeven milk price covered a farm’s costs in a season, but excluded capital expenditure or principal repaid on loans.
Storey said farm working expenses edged up slightly to $5.91 per kilo of milk solids, reflecting ongoing cost pressures.
Recent StatsNZ figures showed the highest spend across all farms in the June quarter was on insurance premiums, followed by dairy sheds and then electricity.
The sharpest increases were for livestock purchases, up 18% and electricity, up 11% compared to the same period last year.
The largest reduction in costs for the year was for interest rates, down 19%.
Storey said input prices were “stubbornly” high and creeping up, but were fortunately offset by strong milk prices.
“It seems to be on pretty solid footing at the moment,” he said.
“Our advice to farmers is you can only control what you can control, and that is things like your input costs, and obviously pasture growth and those kinds of things, so that’s the message to farmers - deal with what you can.
“And overall, there’s reason to be continually optimistic.”
Looking back on last season (2024/25), processors Synlait and Fonterra nudged up their last season’s farmgate milk prices through the year.
The two will lock in their final milk prices for last season on Thursday for Fonterra and Monday for Synlait.
For last season, Fonterra’s forecast midpoint is $10.15 per kilo (of milk solids), while Synlait’s is $10 a kilo and Miraka of Taupō is $9.60.
- RNZ
