Hamilton City Quarterly economic monitor - September 2019

Total dairy payout

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Highlights for Hamilton City

  • Hamilton City's total dairy payout for the 2018/19 season is estimated to have been approximately $12.6m.
  • Hamilton City's dairy payout for the 2019/20 season is expected to be approximately $13.9m, $1.38m higher than last season, assuming that production levels from last season are maintained.
  • The total dairy payout for New Zealand is estimated to have been approximately $11,961m in the 2018/19 season, and is expected to be $1,318m higher in the 2019/20 season.

National overview

New Zealand’s dairy sector outlook has improved significantly over the last month, with strong trade prices strengthening pay-out expectations for the 2019/20 season. Fonterra’s recent milk pay-out revision to between $6.55-$7.55/kgms, with a midpoint of $7.05, is in line with our own internal expectations for the milk price. This pay-out will put $1.3b more into the economy over the next year. This higher pay-out will be welcome news to regional New Zealand after downbeat dairy news in recent months. Higher dairy prices have been driven by tightened milk supply, with milk volumes globally continuing to see only sluggish growth, and even New Zealand’s production growth has slowed back to 1.2%pa in September.