Dairy commodities sustain high prices

Price rises across dairy commodities drove an annual increase in the value of exports for dairy products, Stats NZ said today.

In the year ended July 2022, the total export value of milk powder, butter, and cheese increased $2.8 billion (17 percent) to $18.8 billion, compared with the year ended July 2021.

“Dairy products had a strong finish to the export season with a continuation of high prices, especially in the second half of the season,” international trade statistics manager Alasdair Allen said.

The annual increase was heavily driven by exports of milk powder, up $1.1 billion to $10 billion and milk fats, including butter, up $1.1 billion to $3.8 billion from the year ended July 2021.

Over half of the dairy commodity group exports were made up of milk powder products (55 percent). Milk powder, butter, and cheese made up 28 percent of total annual exports of all commodities.

Other annual increases within dairy products included fresh milk and cream, up $231 million (21 percent) to $1.3 billion, and cheese, up $112 million (5.3 percent) to $2.2 billion.

Outside of our main dairy commodities, there was also a large annual rise for casein in July 2022.

Annual casein exports were valued at $1.6 billion, a record high. This was an increase of $518 million (up 48 percent) from the previous year. The quantity exported rose 3.9 percent, and the price per kilogram of casein increased 41 percent to $16.79.

Although the quantity for milk powder, butter, and cheese decreased 9.1 percent, the average unit price saw an increase of 28 percent, increasing from $4.82 to $6.16.

Compared with the year ended July 2021, unit price changes for dairy products included:

• milk powder (up 27 percent)
• milk fats including butter (up 40 percent)
• milk and cream (up 20 percent)
• cheese (up 19 percent)
• whey and other products (up 23 percent)
• casein (up 41 percent).

Another dairy-based commodity, preparations of milk, cereals, flour, and starch (including infant formula), saw a much smaller increase in unit price, up 0.1 percent. Export values fell $25 million (1.7 percent) to $1.5 billion.

However, prior to the 0.1 percent annual increase in July 2022, infant formula had nine consecutive falls in year-ended prices.

Annual export volumes of dairy products in the year ending July 2022 were comparable with previous seasons, resulting in an overall increase heavily driven by higher prices.