We know dairying is big in New Zealand, but it’s even bigger in China.
China’s dairy herd has shrunk by two million cows in the past year.
There has been a mass exodus of small dairy farmers due to high production costs and record beef prices.
Dairy Australia industry analyst John Droppert says China has killed more cows this year than the entire Australian dairy herd.
That’s about 20% of New Zealand’s dairy herd.
“Basically it means production in the country is in a hole, in short,” he said.
“But you are certainly seeing a reduction in production, I think they are talking 10-15 per cent this year.
“Effectively that means at the broader level they have a bigger gap.
“Demand is growing and at the same time supply is shrinking.”
This is the main reason demand for milk from New Zealand is so strong and is likely to remain so which is good for the whole economy.