NZ Catchment Groups Thrive with ‘Source to Sea’ Approach
The most successful catchment groups in NZ are those that have 'a source to sea' approach.
MPI’s September quarter ‘Situation and Outlook for Primary Industries’ predict primary sector exports will reach $38.1 billion for the year to June 2017 – up 2.4% on the previous year. This is mainly thanks to a 10.1% rebound in dairy exports after two poor years in 2015 and 2016.
However, meat and wool exports show a steep decline, dropping 9.2%.
Looking ahead, primary sector exports are expected to increase 9.2% to reach $41.6b for the year to June 2018, with dairy continuing its strong growth (up 18.5% to $17.4b) and meat and wool recovering slightly (up 1.5% to $8.5b). Most other sectors are expected to post solid growth, with forestry up 5.0%, horticulture up 5.1%, seafood up 6.1%, arable up 7.3% and ‘other’ up 0.8%.
These forecasts are little changed from the previous June quarter ‘Update’.
Dairy prices slipped in the last Global Dairy Trade auction. Overall, the GDT Price Index was down by 1.0%, with whole milk powder down 0.5% and skim milk powder down 5.6%.
The only product that rose in price was anhydrous milk fat, up 5.2%. The average winning price was US$3204 and 35,669 tonnes were sold.
This is the sixth decline out of nine auctions held over the past four months, with the index down by 5% over that period. However, prices are still 16% higher than the same time last year.
This week’s drop was a little unexpected given the impact of wet spring weather on milk production which saw Fonterra reduce its forecast growth in milk collection for the season from 3% to 1%. So far buyers seem unfazed.
Looking ahead, if New Zealand’s milk production remains flat this should provide support for prices but increasing European and US milk production could negate this. Some but not all economists now think Fonterra’s $6.75/kgMS payout forecast will need to be trimmed.
• Nick Clark is general policy manager at Federated Farmers.
