Thursday, 16 June 2016 16:55

Strong growth across most primary sectors

Written by 
The strong growth forecast across most sectors and dairy prices expected to gradually increase over the next two years. The strong growth forecast across most sectors and dairy prices expected to gradually increase over the next two years.

The Ministry for Primary Industries (MPI) says the outlook for New Zealand primary industries is positive.

The strong growth forecast across most sectors and dairy prices expected to gradually increase over the next two years.

MPI Director of Sector Policy, Jarred Mair, says the latest Situation and Outlook for Primary Industries (SOPI) shows that, overall, exports have returned to growth this year – providing a clear signal of the strength of our primary industries.

"New Zealand primary industry export revenue is estimated to reach over $36.7 billion in the year ending June 2016, supported by strong growth in horticulture and other primary sector exports and foods," says Mair.

Recent years have provided challenges for a number of our sectors, and underlined the highly competitive and dynamic markets we trade in.

For some sectors a drop in the New Zealand dollar has softened the impact of lower US dollar prices. Meanwhile on-farm, production across the primary sector has been relatively stable as El Nino conditions did not result in widespread drought.

"The dairy industry has responded decisively to the subdued outlook through consolidation of their businesses to improve productivity and manage their costs," says Mair.

"Dairy prices have remained weak as global supply is still abundant. New Zealand production is down marginally but export volumes are up. Production is still high in the EU [European Union], which is keeping downward pressure on prices.

"Overall there has been a 6% decline in the value of dairy exports in the past year, but an expected gradual price recovery should lead to increasing dairy export values looking out 2 to 3 years. Overall our forecasts show 34% growth out to 2020."

Mair says horticulture exports are expected to continue their run of impressive growth over the medium term.

Horticulture exports exceeded $5 billion for the first time in 2015/16. Kiwifruit exports hit record levels for the year to March 2016, and exports of wine, apples, and pears are increasing due to new plantings reaching maturity. As an example, apple and pear export revenue has doubled since 2012, estimated to reach almost $700 million for the year ending June 2016. Horticulture prices have also increased as New Zealand has maintained its position as a supplier of premium products.

"Strong growth is also being seen in exports of innovative processed foods, honey, live animal, and other products.

"The outlook for the primary sector is supported by industry's significant investments in processing capacity across the country in a range of sectors.

"Free trade agreements will also help grow our exports, while population growth and economic development throughout Asia will support increased demand for New Zealand's protein, horticulture, wood, and fibre products," says Mair.

More like this

Massive bounce back

The Director General of MPI, Ray Smith, says the growth in the kiwifruit sector is a massive bounce back.

$8b export milestone

Horticulture Minister Nicola Grigg says she takes her hat off to all NZ growers for the hard yards they have put in over the last few years which have resulted in horticulture exports expected to reach the milestone of $8 billion this year.

Dairy earnings bounce back

"We at Ministry for Primary Industries (MPI) and you at Dairy News said over six months ago that the dairy industry would bounce back, and it has done so with interest.”

China still a good option

The ongoing rise of the Chinese middle class will drag up demand for New Zealand products there in the future.

Featured

Let the games begin!

New Zealand's largest celebration of rural sports athletes and enthusiasts – New Zealand Rural Games - is back for its 10th edition, kicking off in Palmerston North from Thursday, March 6th to Sunday, March 9th, 2025.

The future of beef breeding

Progeny testing at Pāmu’s Kepler farm in Southland as part of Beef + Lamb New Zealand’s Informing New Zealand Beef programme is showing that the benefits of hybrid vigour could have a massive impact on the future of beef breeding.

Editorial: GMO furore

OPINION: Submissions on the Government's contentious Gene Technology Bill have closed.

Chilled cow cuts enter China

Alliance Group has secured greater access for chilled beef exports into China following approval of its Levin and Mataura plants to supply that market. With its first load of beef from Levin clearing Chinese customs in early January and a shipment from Mataura recently arriving in China, journalist Leo Argent talked to Alliance general manager safety and processing Wayne Shaw.

National

New CEO for Safer Farms

Safer Farms, the industry-led organisation dedicated to fostering a safer farming culture, has appointed Brett Barnham as its new chief…

Machinery & Products

AGCO and SDF join hands

Tractor and machinery manufacturer AGCO has signed a supply agreement with the European-based SDF Group, best known for its SAME,…

» Latest Print Issues Online

The Hound

Sacrificed?

OPINION: Henry Dimbleby, author of the UK's Food Strategy, recently told the BBC: "Meat production is about 85% of our…

Entitled much?

OPINION: For the last few weeks, we've witnessed a parade of complaints about New Zealand's school lunch program: 'It's arriving…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter