Number of New Zealand dairy cattle decreased 300,000
Global dairy prices plummeted 65 percent in U.S. dollar terms between February 2014 and August 2015 because of increased supply, sanctions on Russian imports and reduced Chinese demand.
Prices have increased since August lows but remain well below long-term averages.
The number of New Zealand dairy cattle slipped to 6.69 million in June, according to official data - a drop of about 300,000 on the previous year and the first annual reduction since 2005.
The figures were released as the Reserve Bank of New Zealand (RBNZ) warned that half the country's dairy farmers made a loss in 2014-2015, prompting bank lending to the sector to jump 10 percent to $NZ40 billion ($37 billion). Four in five farmers are expected to have negative cash flows in 2015-20 16.
The central bank is concerned about banks' exposure to the dairy sector, which has undergone a rapid expansion over the past decade as farmers sought to tap into China's growing demand for milk. Last month the RBNZ asked the five biggest lenders to the sector to stress-test their dairy loans. ■