NZ Farmers Power Economy as Primary Exports Hit Record $64 Billion

Two reports, released at National Fieldays last week, show record farmgate prices across dairy, red meat, and horticulture sectors.

Primary Export Earnings Reach Historic Highs

The Situation and Outlook for Primary Industries (SOPI) report, from Ministry for Primary Industries (MPI), shows that export earnings will top $64 billion for year ending June 2026.

ANZ's Agri Focus for June notes that farmgate prices are at or very near record levels for beef, lamb, mutton and wool. Milk, venison, kiwifruit, and apples aren't too far behind.

It's all systems go for these sectors, the report says.

Government Highlights Farmer-Government Partnership

Agriculture Minister Todd McClay told Rural News that the record export earnings reflect "a real partnership" between farmers and the Government.

"It's become a real partnership and over the last few years we've simplified rules, taken the costly ones that don't work away and backing farmers to make smarter decisions for themselves," he says.

"They know they have to meet their environment and climate obligations and they're willing to do that."

McClay had a dig at the previous Labour government, claiming farmers were sick of "all of the unworking, costly rules that Labour had put in place".

He says there's also greater demand around the world for the high-quality food and fibre that New Zealand produces.

"And our trade deals are certainly helping."

Sheep and Beef Farmers Enjoy One of Their Best Years

Beef + Lamb NZ chair Kate Acland says sheep and beef farmers are having one of the best years ever and are feeling positive about the outlook.

"After several challenging seasons in 2023-24, we're having one of the best years we've ever had, there is a real sense of optimism on farm," Acland told Rural News.

"Stronger prices are giving farmers more confidence to plan ahead and reinvest in their farm businesses.

"They're also spending in their rural and regional communities, which is helping the New Zealand economy through a tough period. We know that when farmers do well, the rest of New Zealand does well.

"Demand from ov erseas markets remains strong for New Zealand red meat, with growth in North America continuing and pricing firm in other markets.

"That continued demand shows the confidence global customers have in New Zealand's red meat sector and the strong reputation we hold in premium markets.

"However, there remains a high degree of uncertainty, particularly around the US tariff situation and the ongoing Middle East conflict.

"Farmers will be keeping an eye on key input costs such as fuel, freight and fertiliser as a result of the disruption to the global supply chain.

"Every farmer knows that while revenue is improving, costs can move just as quickly."

Dairy Sector Continues Strong Performance

ANZ agri economist Matt Dilly says that despite everything happening overseas, New Zealand's agriculture sector is doing incredibly well.

"Dairy prices have been strong for two seasons running, alongside great pasture conditions. The tail end of last season and the start of the new season look positive as well, despite robust milk production globally," says Dilly.

Wine, Forestry and Grains Face Ongoing Challenges

However, wine, forestry, and grains are conspicuously missing from the upbeat assessment.

Dilly says these sectors are still struggling to varying degrees with oversupply, low prices, and higher production costs.

McClay agrees that the arable sector is quite challenging now.

He says there is a range of reasons for that.

"That's why I've appointed Mike Butterick (as Associate Agriculture Minister) giving him specific responsibility of delegation to the arable sector so he can get stuck in and work very closely with them to start working out what some of the challenges are and support them more.

"Wine is also a bit challenged and some of that is oversupply of grapes because actually by value around the world, our wine industry is still doing very well."