Primary industry brightens export prospects

Damien O’Connor

Wellington, December 11, 2017

The growth in New Zealand’s primary industry exports is impressive and provides the sector a strong base to deal with the challenges ahead.

The latest Situation and Outlook for Primary Industries report shows the sector’s exports will grow by 8.5% in 2018, to $41.4 billion.

This would be the largest annual increase since 2014 when dairy prices rose to very high levels.

Growth this year is spread across all sectors and these gains are expected to be built on a more sustainable foundation.

Dairy Exports leading

Dairy exports are leading the way, with a forecast increase of 15% to $16.8 billion in 2018 despite the wet spring affecting production.

Despite a decline in cow numbers, there has been some better value for exporters.

The sector continues to provide a solid base for a better future.

Meat and wool exports are forecast to grow 4.2% to $8.7 billion, with lamb prices looking really good and beef, mutton, and venison also doing very well.

The forestry sector is on pace for a third consecutive year of strong export growth with exceptional demand from China. Forestry exports are forecast to reach nearly $5.7 billion in 2018.

Primary Industries evolving

New Zealand’s primary industries are evolving.

Our horticulture sectors are leading the charge in producing high-value products tailored to target markets overseas.

This is not just true for kiwifruit, wine, and apples – there are also emerging opportunities for cherries, avocados, and berries.

We are also seeing a huge shift to high-value products in the dairy sector. For example, infant formula exports are forecast to exceed $1 billion in 2018 for the first time. UHT milk, yoghurt, and other specialty products are also doing very well.

We are a primary producing nation and it is very encouraging that the prospects for the primary industries look so bright.

Sustainability Challenge

However, New Zealand and other primary producing nations face the global challenge of sustainability – we need to provide good quality, nutritious food for a rapidly rising global population but we must do this in a way that is sustainable.

This means placing an even greater focus on high-value production, sustainable resource use, managing the risks posed to our primary sector by harmful pests and diseases, and meeting ever changing consumer demands.

The news is also good for other sectors:

* Horticulture exports are forecast to grow 5.2% in 2018 with broad-based growth across the sector. Wine, Kiwifruit, and Pipfruit are all contributing to this growth story, and there is a high level of investment supporting further growth.

* Rising prices for wild capture fisheries products and aquaculture volumes are expected to contribute to a 4.4 per cent increase in seafood exports to $1.8 billion.

* Honey export volumes are forecast to resume growth after a dip in 2017, while exports of innovative processed foods, including dietary supplements products, are expected to resume their growth.

The Situation and Outlook report is available on the MPI website at: http://www.mpi.govt.nz/news-and-resources/open-data-and-forecasting/situation-and-outlook-for-primary-industries-data/

Damien O’Connor is Agriculture Minister of New Zealand. Picture Courtesy: Wikipedia

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