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The recovery in the primary sector is largely led by the dairy and horticulture sectors.
Export revenue for the primary sector is forecast to bounce back in the coming year – but still not back the high levels of 2022/23.
The latest report by the Ministry for Primary Industries on the state of the primary sector shows that export revenue from the food and fibre sector in the 24/25 year will rise by 7% to $56.9 billion and hit $58.3 billion in 25/26. This recovery is led by dairy, up 10% to $25.5 billion, and horticulture, up 12% to $8 billion – a major milestone for this sector. Horticulture is the only sector that has enjoyed continuous incremental growth over the past six years and is expected to top nearly $8.5 billion in 25/26.
At the other end of the scale, meat and wool is just holding its own with no appreciable growth now and into the future.
The report notes that although there is elevated global uncertainty due to various wars, food and fibre export returns will rebound due to better in market prices and the tightening of global supplies of key commodities such as dairy, beef and mutton.
When it comes to uncertainty, the word China, our largest export market quickly comes to mind. The China market remains sluggish but their government has introduced a series of stimulus packages to kick-start their economy. The word from MPI and other business people who’ve been in China of late is that things are on the improve – but slowly.
Other positive news is reflected in the fact that MPI is forecasting that average farmgate milk price will be $9.60 per kg/ms.
According to MPI’s Director General, Ray Smith, the global economic environment is showing signs of improvement and inflation is returning to target levels and interest rates are declining. Agriculture Minister Todd McClay says now more than ever global consumers are demanding high-quality, safe, and sustainable food and fibre products and New Zealand producers are well placed to provide this.
This report will also help validate a recent survey of farmer confidence which shows that this back to 2017 levels. So, some good news to end the year.
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