DCANZ Sets Five Policy Priorities to Protect and Grow NZ Dairy Exports

Summary

The Dairy Companies Association of New Zealand (DCANZ) has released a policy roadmap, 'Government Action Priorities', on behalf of major dairy processors including Fonterra, Tatua, Synlait, Miraka and Open Country Dairy, calling on the next government to commit to five core policy pillars before the election. DCANZ says dairy accounts for one in every three dollars of New Zealand's merchandise trade revenue, with export revenue growing by more than $9 billion since 2020. Its top priority is an ambitious, rules-based international trade agenda, including decisive action on Canada's dairy tariff quota distortions and subsidised Class 4a milk pricing under CPTPP, upgrading free trade agreements with the EU and India, and developing long-term trade diplomacy strategies for core export destinations China, the US and India, which together account for 40 percent of global dairy consumption.

The second and third pillars focus on export competitiveness infrastructure and streamlined food regulation, including a bipartisan national ports strategy, long-term freight network investment, energy market reform to ensure competitive electricity prices and grid capacity, and simplifying MPI export assurances and modernising gene technology regulations. The final two priorities cover nutritional integrity and national biosecurity resilience. DCANZ advocates for evidence-based food standards consistent with Codex, prohibiting non-dairy plant-based alternatives from using traditional dairy names such as 'milk' or 'cheese', revising the Health Star Rating to recognise the nutrient density of natural cheese, and establishing pre-agreed international trade continuity protocols for heat-treated dairy products in the event of exotic disease outbreaks such as foot-and-mouth disease.

New Zealand exports more than 95 percent of its milk production, and the health of the sector directly affects rural land values, co-operative shareholder dividends and the balance of payments.

Commentary

The policy roadmap from DCANZ highlights deep-seated challenges facing dairy exports. Dairy accounts for one-third of New Zealand's merchandise trade revenue, with export revenue growing by more than $9 billion since 2020, but the global trade environment is increasingly complex. DCANZ's top demand is stronger rules-based trade, particularly targeting Canada's dairy tariff quota distortions and subsidised pricing under CPTPP, reflecting the enforcement difficulties New Zealand has encountered in existing free trade agreements.

For New Zealand small and medium business owners, market access barriers in Canada could mean losing a high-value market, and government pressure through dispute settlement mechanisms would help restore fair competition. DCANZ also calls for upgrading free trade agreements with the EU and India and developing long-term trade diplomacy strategies for China, the US and India, which together account for 40 percent of global dairy consumption. China is New Zealand's largest dairy export market, and any shift in trade policy will directly affect orders for processors such as Fonterra and the incomes of dairy farmers.

SMEs should watch whether the government can secure more favourable tariffs and quotas in bilateral negotiations, especially for high-value products such as infant formula and cheese. Infrastructure and energy costs are another key issue. DCANZ wants a bipartisan national ports strategy and long-term freight investment to eliminate the impact of regional rail, road and shipping disruptions on perishable dairy products.

New Zealand's dairy exports rely on efficient cold chain logistics, and port congestion or insufficient rail capacity can lead to product delays and higher costs. Energy market reform aims to ensure competitive electricity prices and grid capacity and accelerate decarbonisation of processing. For small and medium dairy processors, energy costs account for a relatively high share of processing costs, and rising electricity prices squeeze margins.

If the government can drive renewable energy investment and grid upgrades, long-term operating costs will fall. On regulation, DCANZ advocates simplifying MPI export assurance processes and modernising gene technology regulations to safely promote environmental emissions inhibitors. This provides policy certainty for companies adopting new technologies but requires balancing overseas consumer trust.

DCANZ also wants to prohibit plant-based alternatives from using traditional dairy names such as 'milk' or 'cheese' and revise the Health Star Rating to recognise the nutrient density of natural cheese. This is not just a labelling dispute but a fight to maintain dairy's nutritional positioning in consumers' minds. For exporters, clear labelling rules help avoid confusion in overseas markets and protect the brand value of New Zealand dairy.

Biosecurity resilience is the last line of defence. DCANZ calls for pre-agreed international trade continuity protocols for heat-treated dairy products in the event of exotic disease outbreaks such as foot-and-mouth disease. New Zealand exports more than 95 percent of its milk production, and a trade disruption from an FMD outbreak would cause catastrophic losses.

Pre-agreed protocols would ensure heat-treated products can continue to be exported, reducing the economic shock. SMEs should assess their own biosecurity plans and work with industry bodies to push the government to implement such agreements. DCANZ's policy roadmap is not just a wish list from large companies; it concerns the stability of the entire supply chain.

The high wages and pasture-based economic model of New Zealand's dairy industry depend on export competitiveness, and any regulatory or infrastructure bottleneck erodes profits. For small and medium business owners, understanding these policy priorities helps anticipate market changes and adjust business strategies. For example, if the government successfully upgrades the free trade agreement with India, it would open a high-growth market, and SMEs could prepare product certification and channels in advance.

Conversely, if the Canada trade dispute drags on, companies need to find alternative markets or adjust their product mix.

Keywords: DCANZ, dairy exports, policy roadmap, international trade, biosecurity, dairy labelling, CPTPP, Fonterra

Photo by Andrew-Art on Pixabay

Source: edairynews.com