Primary products exports forecast to grow

Minister for Primary Industries Nathan Guy.

Primary sector exports are forecast to grow to $41.6 billion in the year to June 2018 - the highest level ever.

It was shaping up to be a ''bumper year'' after some challenging past seasons of wet conditions, earthquakes, cyclones and volatile global commodity prices, Primary Industries Minister Nathan Guy said.

The Ministry for Primary Industries released its latest Situation and Outlook for Primary Industries at the National Fieldays at Mystery Creek.

Dairy export revenue was forecast to climb to $14.6 billion for the year ending June 2017, representing a recovery of global dairy prices.

Export revenue was forecast to continue to rise through to 2021, provided butter prices remained strong and overall global supply and demand remained balanced for most dairy products.

Cow numbers were forecast to remain stable into the 2017-18 season, but increased production per cow should push milk solids production up 2% from a wet 2016-17 season, assuming normal weather.

Milk production reached record levels in March and April, meaning the forecast for the 2016-17 season production was now down only 0.7% on the previous season.

Production was forecast to increase around 1% per year over the remaining years out to 2021, as a result of productivity improvements.

That rate of increase was much smaller than the average production increase of 4% per year achieved over the previous decade.

The past growth had been primarily driven by rising cow numbers and dairy land area, in response to relatively strong milk solids prices.

The lower growth forecast reflected a stabilising of dairy land use, in response to both price signals and also potential environmental constraints.

A fall in beef and sheep meat volumes compared with last year were driving a 9.8% fall in meat and wool export revenue for the year to June 2017.

Prices for lamb, beef and venison were finishing the year much higher than previously expected, which had helped to offset some of the lost volume.

Export revenue was forecast to recover to $9.1 billion over the outlook period due to rising prices and stable meat production volumes.

Forestry export revenue was expected to rise by 6.4% to $5.5 billion for the year ending June 2017.

A record harvest volume of 30.7 million cubic metres for the year ended December 31, 2016, was driven by relatively stable and record high log prices and a large supply of harvestable wood.

Export revenue was forecast to reach $6.3 billion by 2021, underpinned by strong global demand.

Horticulture exports were forecast to reach $5.3 billion for the year ending June 2017, before increasing steadily to exceed $6.3 billion by 2021. Growth was expected to be led by apples and wine for the year ending 2017.

Arable exports for the year ended June 2017 were expected to be $184million, down $21million on 2016.

The vegetable seed export market remained steady while high international stocks had reduced demand for herbage seed exports. The domestic market for arable products had improved alongside rising dairy prices.