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Southern dairy farmers are part of a sector strengthening regional communities, growing export earnings and helping build a more productive and prosperous economy, a report shows.
Recently released analysis by Sense Partners shows the dairy sector remains New Zealand’s largest export earner, generating $28.8 billion in the year to December 2025.
More than 51,000 jobs in the sector nationally includes more than 4000 jobs in Southland and nearly 2000 jobs in Otago.
Dairy farm business DuoReges co-owner Justin Koenig owns a 1450-strong milking herd, producing more than 856,000kg of milksolids last season on his farm in Kapuka, east of Invercargill.
He employs six fulltime staff and a contract milker.
Other seasonal workers includes calf rearers.
Mr Koenig left a career as a plumber in Waikato to take on a 50:50 share-milking opportunity on the Kapuka farm in 2007.
Since 2007, production had lifted from 490 cows putting 198,000kg of milksolids in a vat during a season.
“Since we’ve arrived, we’ve been contributing to the Southland gross domestic product (GDP) and built a cowshed, a winter shed and four houses.”
When they arrived, the farm had two houses on it.
Now the farm had 12 houses on it, from buying neighbouring properties and building the four new homes.
The house construction and ongoing maintenance, such as installing double glazing in most of the properties, had supported other sectors and further contributed to regional GDP.
“Dairy farming is not just about producing milk and employing people,” Mr Koenig said.
The report “Turning regional production into national income: dairy’s economic contribution to New Zealand” was commissioned by DairyNZ and the Dairy Companies Association of New Zealand (DCANZ)
DCANZ executive director Kimberly Crewther said the report shows how dairy had grown exports for New Zealand’s economic benefit.
Since 2021, dairy has delivered $8.3b in additional export revenue and contributed nearly half of New Zealand’s total goods export growth, Ms Crewther said.
DairyNZ head of economics Mark Storey said the report shows how the dairy sector was a major purchaser of output from many other sectors, making it one of New Zealand’s most important economic sectors.
The dairy sector was a major contributor to economic activity in regional New Zealand including delivering 10.6% of Southland’s GDP.
The dairy sector paid nearly $4b in wages in the year to December 2024, comprising of $1.5b from dairy farming and $2.5b from dairy processing.
The value of dairy employment was amplified in places with high processing intensity, Mr Storey said.
In Waimate, dairy represents 37.3% of employment and 48.9% of the wages.
In Southland, 19% of jobs were in the dairy sector and account for 26.9% of wages.
The more than $349 million in dairy wages paid annually in Southland was 10.8% of all wages paid in the province.
In Southland, dairy farming accounts for $173.3m of wages and dairy processing for $176.2m.
Dairy is the largest sector in Southland, contributing $955.4m to the region’s GDP.
“Backing dairy is about backing regional communities, economic growth and a more productive New Zealand,” Mr Storey said.
Farmers and processors in New Zealand spend billions of dollars on goods and services each year, helping sustain jobs and economic activity in sectors ranging from transport and manufacturing to professional services, technology and rural contracting.
Beyond the farm and factory gates, dairy supports a wide network of businesses.
The report shows dairy’s reach across the wider economy.
Dairy farming was a top 10 purchaser of output from 35 other sectors, while dairy processing ranks in the top 10 for 25 other sectors.
“Maintaining a competitive operating environment, including reliable and affordable energy, will be critical to ensuring New Zealand’s dairy sector can continue delivering jobs, export revenue and economic growth for the benefit of all New Zealanders.”
