South leads dairy boom

The South Island is driving the expansion of the dairy industry as competition for land in the North Island stymies the march of dairy conversions.

Herds in the South Island grew by 13 per cent last year, with 31 per cent of New Zealand's dairy herds now in the South Island.

The South Island growth has come at the expense of lamb finishing where farmers have sold out or converted to dairying.

But growth has been halted in the North Island and cattle numbers are dropping as competition for prime dairy land for lifestyle blocks and other non-pastoral uses heats up, according to the Ministry of Agriculture and Forestry's Situation and Outlook report.

At June 30 last year, there were 4.2 million dairy cows and heifers in milk or in calf up 0.7 per cent on the previous year while total dairy cattle numbers increased by 1.8 per cent, reflecting the replacement of more heifers for dairy-farm expansion.