Dairy cow numbers in New Zealand have declined for the first time in nine years following consecutive increases, the latest figures from Statistics New Zealand show.

The number of dairy cattle in New Zealand fell to 6.5m in 2015, with the statistics showing 213,000 fewer dairy cattle in the country than there were for the year ending June 2014.

Business Indicators Senior Manager, Neil Kelly, said that the dairy cattle number is now similar to the level back in 2013.

“This reduction was caused by an increase in the number of cows slaughtered and was against a backdrop of declining milk solid payouts.”

The 2015 Agricultural Production Survey final result shows that, this drop in dairy cattle numbers follows a record high of 6.7m dairy cattle in 2014.

In the Waikato region, a traditional dairy farming area, there were 153,000 fewer dairy cattle than in 2014.

The results also show that New Zealand had 29.1m sheep, 3.5m beef cattle, and 900,000 deer at June 30 2015.

“Sheep numbers have continued to decline. There are now just over six sheep for every New Zealander, down from 13 sheep per person 20 years ago,” Kelly said.

The 2015 Agricultural Production Survey covered land use, animal farming (livestock), arable crop growing, forestry, and farming practices in New Zealand (including fertiliser and cultivation) for the year to June 2015.

Dairy prices set to recover this year as production slows

Meanwhile, global dairy prices will recover over the rest of 2016, as EU and New Zealand milk production begins to slow, according to Nathan Penny, Rural Economist with ASB Bank.

With post-quota production surging and low milk prices, both EU and New Zealand dairy farmers have been feeling the pinch.

Furthermore, with New Zealand production likely to fall and Chinese demand improving, Penny maintains that the conditions for the dairy price cycle turning are falling into place.

In EU milk production terms, Penny says that comparing milk production pre and post the quota removal, using annual changes, is dairy’s equivalent of comparing apples with oranges.

EU production was held back before quotas were removed last year and it then soared after quotas were removed.

Now however, this post-quota surge has passed and production growth has slowed as farmers struggle with low returns for their products, according to the economist.

In official EU data, this third point gets lost and as a result, Penny says that the annual comparisons overstate the recent trends in EU production growth.

“For example, the EU Commission shows that April 2015 to January 2016 was around 4% higher than the same period a year earlier.

“In comparison, annualising the seasonally-adjusted data over recent months shows that EU production is falling or at best flat.

“Moreover, with most dairy market buyers unware of this data disconnect, we expect some to be caught short of supply later this year,” Penny said.

Therefore, as this happens global dairy prices are likely to climb, he said.