October 27, 2025
#28 A Raw Deal? The True Cost of Dairy in Aotearoa
Māori scholar Matt Wynyard situates increasing tensions about the social and ecological costs of dairying in Aotearoa New Zealand. The sector, whose evolution is firmly entangled with the history of settler colonialism, has seen rapid transformations since the 1980s through successive processes of farm concentration, intensification, corporatization and financialization, whose cumulative effects have become a matter of social contestation.
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Like many places, Aotearoa New Zealand is currently struggling with a cost-of-living crisis driven by a number of factors, including high unemployment, housing costs, rising energy prices and food price inflation. Dairy prices in particular have risen sharply. In the year to April 2025, milk prices rose 15.1%, cheese prices rose 30.1% and butter prices were up by a staggering 51.2%
[1]. When asked why New Zealanders were forced to pay such high prices, Fonterra head, Miles Hurrell said that high butter prices were a ‘good news story for New Zealand’
[2]. Hurrell, who personally received $5,924,782NZD in remuneration in 2024
[3], told reporters that he didn’t think consumers were being ‘ripped off’
[4]. Hurrell’s comments were met with consternation by some economists and child poverty advocates for lacking any sense of social responsibility to the people of Aotearoa, particularly at an already difficult time for many households
[4]. This lack of any sense of social responsibility should perhaps not come as such a surprise, however. The dairy industry in Aotearoa has long prioritised profit over other concerns and has, at times, seemingly operated without regard to the people of Aotearoa or, indeed, to our lands and natural resources.
In response to growing concern about butter prices, New Zealand’s Finance Minister, Nicola Willis summoned Hurrell to Wellington to explain. After the meeting, Willis, who herself spent six years as a lobbyist and manager at Fonterra, told reporters that she was ‘satisfied’ that consumers in Aotearoa are not ‘getting a raw deal’
[5]. In the days that followed, New Zealanders were again told that high butter prices were a good thing and that the extra money going into the economy would benefit all
[6]. In this contribution I argue that whatever ‘social licence’ Fonterra has to operate in Aotearoa has been tested in recent years and that any remaining goodwill is contingent on the increasingly contested idea that what is good for the dairy sector is good for all. I conclude by arguing that foreign investment in the New Zealand dairy sector, including the recent proposed sale of well-known local brands to French multinational Lactalis, might further test the palatability of intensive dairy farming in Aotearoa.
In Aotearoa, early capitalist development was almost entirely contingent on the dispossession of Māori land. The growth and development of an export dairy industry in Aotearoa was made possible through systematic dispossession, starting in the Taranaki and Waikato regions of Te-Ika-ā-Maui. Significant areas of land in those regions first came into European possession in the mid-1860s after Crown forces invaded, ostensibly to quell rebellion. Amid the subsequent fighting, the state gave itself authority to confiscate land, and in 1865, the Crown dispossessed Māori of 1,275,000 acres in Taranaki and 1,202,172 acres in Waikato, long the heartlands of New Zealand dairy farming.
Settler desire for Māori land was not satisfied by confiscation and in the decades that followed, Māori were dispossessed of all but a small fraction of our lands through such mechanisms as the forced individualisation of title, entrapment in debt and compulsory acquisition. Pastoral farming became a key marker of Pākehā identity and the violence of colonial land acquisition was largely obscured in settler narratives of development. By about 1930, Māori landholdings had diminished to less than 5 percent of total land in Aotearoa. With the land question solved, New Zealand farmers were confronted by another hurdle to profitability: a lack of trace elements such as phosphorus in local soils
[7]. Here, too, the settler state came to the aid of New Zealand farmers and here, too, Indigenous peoples in the South Pacific were dispossessed in the service of New Zealand agriculture.
During the First World War, the New Zealand government was alerted to the abundance of rock phosphate on the island of Nauru, which was then a German colony. At the conclusion of the war, New Zealand, Britain and Australia awarded themselves the exclusive right to purchase Nauruan phosphates at cost price. Nauru was subsequently strip-mined without regard to the population or the environment. The result was the devastation of Nauru’s environment and biodiversity with spiralling consequences for the health and well-being of the Nauruan people
[8]. Nauruan phosphate was a boon for New Zealand agriculture, however, playing an important role in New Zealand’s post-war boom.
The troubled 1970s saw the end of the post-war boom and in Aotearoa, the problems caused by the OPEC oil shocks and global stagflation were exacerbated by a collapse of commodity prices and Britain’s ascension to the European Economic Community (EEC), which robbed New Zealand producers of a guaranteed market for primary produce. The solution that emerged from the 1970s was neoliberalism with finance capital leading the way. As Klinge [9] notes, foreign investment skyrocketed, large swathes of forestry land in particular was leased to international concerns, including Jukken Nissho and Ernslaw One. Pastoral land was, however, treated differently. Perhaps owing to the sensitivities of land ownership in a contested settler-colony, the centrality of pastoral land to notions of identity and belonging and to a pervasive xenophobia, particularly toward Chinese investment, actual sales of New Zealand agricultural land to foreign investors were somewhat modest. Yet between 2001 and 2021, ownership of 2.5 per cent of New Zealand’s agricultural land was transferred to investors, mostly from the Global North
[9]. Ouma notes a sharp increase in foreign direct investment in Aotearoa farmland between 2008 and 2012 that accompanied the rapid conversion from sheep to dairy in many regions, most strikingly Canterbury
[10] (see also more on this on this
website).
Nearly half a century of neoliberal hegemony has seen sweeping changes to the New Zealand dairy industry and other primary industries and the quaint notion that farming interests somehow align with the interests of the people of Aotearoa has increasingly been called into question. The ecological cost of New Zealand’s recent dairy boom cannot be overstated and this, maybe more than anything else, has tested the social license within which the New Zealand dairy industry operates. Between 1990 and 2023, the number of dairy cattle grew by 71% from 3.4 million to 5.9 million
[11]. Nitrate fertiliser use increased by 629%, from 62,000 tonnes a year in 1991 to 452,000 tonnes a year in 2019
[12]. The impact of intensification on New Zealand’s freshwater ecosystems is nothing short of catastrophic. According to the Ministry for the Environment, 76% of indigenous freshwater fish species, 68% of Indigenous freshwater-dependent bird species and 43% of indigenous freshwater plant species are faced with extinction or are otherwise ‘at risk’. 46% of groundwater monitoring sites and 33% of spring sites show unsafe levels of E. coli. 45% of the entire river length of Aotearoa is unsafe for contact recreation, 55% of New Zealand’s rivers show moderate to severe organic pollution and 46% of lakes are in poor or very poor health
[13].
The catastrophic ecological impacts of New Zealand’s dairy boom are, sadly, not limited to these shores. PKE is a by-product of palm oil production and is used as a supplementary feed on local dairy farms. Despite studies showing that PKE contains higher levels of magnesium, phosphorous and iron than is recommended for dairy cattle, New Zealand imports approximately 2 million tonnes of PKE annually. New Zealand is the largest importer of PKE in the world, accounting for approximately 17% of global supply
[14]. The rapid expansion of industrial palm oil production in recent decades, fuelled in part at least by demand for PKE, has contributed to widespread deforestation, significant biodiversity loss and habitat destruction in Indonesia, Malaysia and West Papua. Much like with Nauru before, the New Zealand dairy industry is outsourcing environmental harm for the sake of profit
[15].
The New Zealand dairy industry is also complicit in the ongoing colonial project in Western Sahara. PhosBoucraa rock sourced from Moroccan state-owned mines in illegally-occupied Western Sahara is used to manufacture ‘superphosphate’ fertiliser which is high in phosphorous, low in cadmium and ideal for New Zealand soils. New Zealand is alone among ‘Western’ nations in continuing to import fertiliser from Western Sahara, forcibly occupied by Morocco since 1975. Two New Zealand companies, Ravensdown and Ballance Agri-nutrients continue to import large quantities of PhosBoucraa despite international pressure and the availability of alternatives
[16].
Despite these significant challenges to the on-going palatability of intensive dairy farming in Aotearoa, the industry continues to expand and has recently attracted significant foreign direct investment from around the globe. While overseas investor access to farmland in Aotearoa has seldom gone uncontested, foreign investment in the New Zealand dairy industry more broadly is ‘often normalised in a context in which overseas connections are part of the national history and rural imaginary’ [10]. Seven of the ten largest international dairy companies have operations in Aotearoa including Lactalis, Nestlé and Danone. In addition, international Private Equity firms, including CVC Capital Partners, PAI Partners and Arrowpoint Capital have investments in dairy processing, as do six foreign-based State-Owned Enterprises including Vinamilk, Mengniu and Sanyuan
[17].
Ouma notes that foreign investment in New Zealand dairy is not inherently more problematic and can in fact be surprisingly “green”. ‘[I]n the critical discourse on foreign investments in farming, “good” local farmers are often placed vis-à-vis “bad” foreign investors’. In actual fact, however, some foreign-owned farming operations are held to higher sustainability and animal welfare standards than many local farms and have, for example, set strict limits on the use of PKE, enhanced carbon retention, prevented effluent runoff and reduced antibiotic use [10]. Despite this, the perception that profits from what is increasingly seen as an environmentally and socially harmful industry, are leaving these shores is likely to rankle with many New Zealanders struggling to afford milk, cheese and butter. The trickle down logic sustaining whatever social licence the New Zealand dairy industry still enjoys is further problematized by FDI. The recent proposed sale of iconic local dairy brands including Anchor and Mainland, household names in Aotearoa and locally-owned since 1886 and 1954 respectively, creates a direct link between local consumption and the offshoring of profits.
[1] Stats NZ (2025) Food prices increase 4.4 percent annually. https://www.stats.govt.nz/news/food-prices-increase-4-4-percent-annually/ (accessed 26 June 2025).
[2] Tweed B (2025) Punching down as the price of butter goes up. E-Tangata. https://e-tangata.co.nz/comment-and-analysis/punching-down-as-the-price-of-butter-goes-up/ (accessed 2 September 2025).
[3] Fox A (2024) More than 11,000 Fonterra staff earn $100,000+ per year. New Zealand Herald. October 7, 2024. A21.
[4] News Reporters (2025) How do NZ's butter prices stack up internationally? 1News. https://www.1news.co.nz/2025/03/20/how-do-nzs-butter-prices-stack-up-internationally/ (accessed 30 June 2025).
[5] Dexter G (2025) 'Butter is expensive right now. There's no getting away from that' - Finance Minister Nicola Willis. Radio New Zealand. https://www.rnz.co.nz/news/political/567795/butter-is-expensive-right-now-there-s-no-getting-away-from-that-finance-minister-nicola-willis (accessed 29 July 2025).
[6] Edmunds S (2025) High butter prices are actually a good thing for New Zealand, economists say. Radio New Zealand. https://www.rnz.co.nz/news/business/568275/high-butter-prices-are-actually-a-good-thing-for-new-zealand-economists-say (accessed 9 September 2025).
[7] Hopkirk C S M (1936) Deficiencies known and suspected in live-stock nutrition of New Zealand. Journal of the New Zealand Grassland Association (5). DOI: https://doi.org/10.33584/jnzg.1936.5.866 (accessed 30 June 2025).
[8] See: Gowdy J and McDaniel C (1999) The Physical Destruction of Nauru: An example of Weak Sustainability. Land Economics. 75, 2.
[9] Klinge T J (2021) Foreign Investments in New Zealand’s agricultural sector and their regulation, 2001-2017. Globalizations. 18: 4: 533-550. https://doi.org/10.1080/14747731.2020.1795427 (accessed 2 September 2025).
[10] Ouma S (2020) Farming as Financial Asset: Global Finance and the making of Institutional Landscapes. Newcastle: Agenda.
[11] Stats NZ (2024) Livestock Numbers: Data to 2023. https://www.stats.govt.nz/indicators/livestock-numbers-data-to-2023/ (accessed 3 July 2025).
[12] Stats NZ (2021) Fertilisers – nitrogen and phosphate. https://www.stats.govt.nz/indicators/fertilisers-nitrogen-and-phosphorus/ (accessed 3 July 2025).
[13] MfE (2025) Our environment 2025 Tō tātou taiao.
[14] Thompson-Morrison H et. al. (2022) Elemental Composition of Palm Kernel Expeller Used as Supplementary Stock Fodder. Sustainability. https://www.mdpi.com/2071-1050/14/23/15752 (accessed 3 July 2025).
[15] See: Delahunty C (2025) Palm Kernel and the colonial project. E Tangata. https://e-tangata.co.nz/comment-and-analysis/palm-kernel-and-the-colonial-project/ (accessed 3 July 2025).
[16] Samaha A (2020) How ‘blood phosphate’ has made New Zealand complicit in a foreign war’. The Spinoff. https://thespinoff.co.nz/society/19-11-2020/how-blood-phosphate-has-made-new-zealand-complicit-in-a-foreign-war (accessed 25 July 2025).
[17] Coriolis (2024) Dairy 2024: The Investor’s Guide to the New Zealand Dairy Industry. Public Report. https://static1.squarespace.com/static/62b234e5b82e3f577d752b01/t/6660cf9ec02b962859926f8a/1717620671253/Coriolis_Dairy_2024_Public_Version.pdf (accessed 25 July 2025).