Number of New Zealand dairy cattle decreased 300,000Staff writer ▼ | December 21, 2015
New Zealand's dairy herd has shrunk for the first time in a decade as the end of the milk boom prompts farmers to cut production costs.
New Zealand The first annual reduction since 2005
Prices have increased since August lows but remain well below long-term averages.
The number of New Zealand dairy cattle slipped to 6.69 million in June, according to official data - a drop of about 300,000 on the previous year and the first annual reduction since 2005.
The figures were released as the Reserve Bank of New Zealand (RBNZ) warned that half the country's dairy farmers made a loss in 2014-2015, prompting bank lending to the sector to jump 10 percent to $NZ40 billion ($37 billion). Four in five farmers are expected to have negative cash flows in 2015-20 16.
The central bank is concerned about banks' exposure to the dairy sector, which has undergone a rapid expansion over the past decade as farmers sought to tap into China's growing demand for milk. Last month the RBNZ asked the five biggest lenders to the sector to stress-test their dairy loans. ■