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NZX is broadening its information product set for the global dairy market by launching the innovative New Zealand Pasture Growth Index. The new index predicts potential grass growth in New Zealand's dairy regions, based on data provided by the national climate station network, and weighted by regional milk production.
New Zealand exports 90 percent of its milk production in the form of milk powders, cheese, butter and associated products. New Zealand cows are pasture rather than grain fed which enables New Zealand to be one of the lowest cost dairy producers in the world. Weather, including sunlight hours and rainfall, determines levels of grass growth which contributes directly to milk production.
"The NZ Pasture Growth Index is a leading indicator that will provide the global dairy industry with a unique tool for assessing supply trends in New Zealand. NZX will develope more information products, like the NZ Pasture Growth Index and The Dairy Trader, to further improve price discovery for globally traded dairy commodities," said NZX Head of Markets Fiona Mackenzie.
NZX developed the NZ Pasture Growth Index in collaboration with the National Institute of Water and Atmospheric Research (NIWA). The NZ Pasture Growth Index is calculated with daily input from New Zealand-wide climate stations, NIWA's virtual climate station network, and a biogeographic pasture growth model.
The index measures grass growth potential based on temperature, water balance and sunlight. It provides an objective measure of the large scale impact of climate events on the New Zealand dairy sector.
"It is ideally suited for early warning of climate shocks and resulting shifts in production volumes, and can be used to track supply seasonality and shifts from usual seasonal timing," said Mackenzie.
NZX will publish daily index values for New Zealand, and the North and the South islands. The information will be released via market feed to the world's leading distributors of market data. Regional values, trend analysis, maps and commentary are available directly from NZX.
For more information about New Zealand Pasture Growth Index, products or data, contact
