Many hurdles ahead for ag

That’s one key message in the latest Situation and Outlook report for Primary Industries (SOPI) produced by MPI. Peter Burke reports.

MPI's latest SOPI report forecasts that for the September quarter primary exports for the year ending June 2019 will rise by a modest 2.5% versus last year’s nearly 12%. 

This modest rise is due mainly to the horticultural sector where exports are expected to rise by 13.1% and reach $6.1 billion by June next year. Dairy exports are forecast to rise by just 2.1% to $17b, while sheep and beef, and forestry, are all expected to remain static. Arable exports are expected to fall. 

The overall rise for the sector is modest and with world markets in something of turmoil it’s conceivable these forecasts could change over the coming months, hence the warning.

The report notes that due to trade disruption, shifting consumer preferences, the risk of pest incursion and a range of sustainability and environmental factors – not forgetting adverse events at home such as droughts or floods – NZ faces big challenges.

It also points out that to make the transition to sustainability, it’s imperative to learn how NZ’s leading farmers are performing and to ensure that other farmers achieve the same competence in all sectors.

“This will require a culture of trust, experimentation and sharing so that new innovation can be adopted rapidly across sectors,” the report says.

It highlights, once again, the need for NZ to quickly produce more higher-value, recognisable, branded products and slot these into markets where consumers are prepared to pay a premium for such.

MPI senior analyst Matt Dilly says meeting the requirements of consumers who will buy our ‘value add’ products is challenging.

“It’s a fast moving environment and MPI is doing a lot of work to better understand consumers,” he told Rural News. 

“I think people often underestimate how engaged consumers are in some countries with provenance, traceability and technology at centre stage. We are operating in an exciting world right now where those sorts of enabling technologies are being developed.” 

Dilly says some of the most engaged consumers in technology terms are in Asia, particularly China, where people frequently go online to check out or purchase items. 

Agriculture Minister Damien O’Connor says the report gives him great confidence as the primary sector and the Government seek more innovative ways of extracting more value from what we produce. He says the move from volume to sustainable value has its challenges.

“In terms of consumers, I think there is a greater focus on that by companies. The question now is can we do it fast enough to shift our production to what people want? 

“Consumers in the world have access to all the information and often a whole variety of options. We must make sure NZ is their first option.”