The values for Dairy this year are again a mixed bag, with some values increasing against the general trend of decreases. The overall values for dairy have not had the same recovery as sheep and beef values from last year’s drops, which perhaps is a consequence of tougher environmental challenges for dairy farming as compared to sheep and beef. The drop in value for R1 heifers is likely due to the prohibition of live animal exports from 2023. Values are likely to fall in future years as the full effect of the ban flows through to values.

A Mixed Age Dairy cow now has a National Average Market Value of $1,528 compared to $1,525 last year – a rise of 0.2%. Rising two-year heifers have recovered from last year’s drop in value increasing by 5.6 to $1,291. Rising one-year heifers have decreased by 4.1% to $707.

Covid-19 has not resulted in a drop in demand for dairy products with the farm gate milk price remaining very strong for the 2021 season and in the forecasts for the 2022 season. Where uncertainty remains is in relation to environmental changes, many of which have had their commencement date deferred by a year due to Covid-19. This has provided a counterweight to the increased farm gate milk price. It is likely that there will continue to be a drop in the total number of dairy cattle in New Zealand as environmental changes force a reduction in numbers. Existing production levels will likely be maintained through better genetics. As a result, we are unlikely to see a spike in values as occurred following record farm gate milk prices in the past.

Availability of labour is a significant issue for the 2022 season as many migrant workers have returned to their home countries. This could result in a reduction in cow numbers and a move to further automation in the future.