June 15, 2010

 

 

New Zealand's farm and forestry exports are bouncing back in the wake of the global recession, according to the Ministry of Agriculture and Forestry (MAF).

 

"Primary producers have picked up where they left off pre-recession, with most in the pastoral, horticultural and arable sectors expected to see improved or steady conditions," MAF said Tuesday (Jun 15) in its outlook to 2014.

 

Beef, lamb, kiwifruit and forestry sectors were all projected to receive higher prices over the five years.

 

Dairy production has been left flat by the effects of drought this year - despite a lift of 4% in numbers of dairy cows available for milking in the 2009-2010 season - and total dairy export earnings are estimated to be down 16%, to NZD9.94 billion (US$6.9 billion) for the year to June 30.

 

But the MAF expects production to rebound in 2011, with a milkprice of NZD5.60 (US$3.89)/kg milksolids, compared with NZD6.10 (US$4.23) in 2010 and to be further lifted by continuing increases in herd numbers.

 

And though an international lift in milk production was expected to constrain dairy commodity prices in the next couple of years, the milk price was expected to hit NZD7.21 (US$5)/kg in the year to May 2014. In that season, dairy earnings were expected to reach NZD15.7 billion (US$10.9 billion).

 

MAF director general Murray Sherwin said a major feature of the farm and forestry-driven recovery had been continuing growth in China.

 

"China dramatically increased its purchases of agricultural and forestry products from New Zealand for the year ended December 2009," he said. Earnings from primary product exports to China rose 49%, to NZD2.19 billion (US$1.52 billion), with dairy and forestry the big contributors.

 

Analysts noted big jumps in the proportion of primary production exports going to Asia and oil-producing countries, with 55% of exports going to Australia and Asia, compared with 5% 50 years ago.

 

Being tied to Asia was giving New Zealand farmers and foresters higher average commodity prices and economic growth and the rising importance of Asia as a destination - particularly for dairy, wood and wool - was expected to be boosted by the free trade agreement with China, analysts said.