3 days ago
Ministry of Primary Industries forecasts export revenue increase of 12% for food, fibre sector
The $59.9b predicted for 2024-2025 is $3b higher than was projected in the last SOPI released in December.
Photo:
AFP / William West
New Zealand's food and fibre export revenue is expected to have reached $59.9b in the year ending June 2025, an increase of 12 percent from the previous year.
Despite warnings that global trade tensions may affect New Zealand's overall export performance, the Ministry of Primary Industries has confidence the food and fibre sector is resilient enough to grow further, forecasting $65.7b 2029.
MPI has released its latest State and Outlook of Primary Industries (SOPI) report, which takes a look at the state of the sector in the 2024/25 year.
In the year to June 2025, dairy export revenue was forecast to have increased by 16 percent on the previous year to a record high of $27b, meat and wool 8 percent to $12.3b, horticulture 19 percent to $8.5b, forestry 9 percent to $6.3b and seafood 2 percent $2.2b.
The increases are a rebound on the previous year's figures, which showed a
7 percent dip in 2023-24
on the year prior.
Global dairy prices in general have been much higher this year due to weak global supply from key exporting regions like the US, and increased import demand from China.
The same was said of meat and wool, with tighter global production and strong demand increasing the export revenue.
Apples and pears were a large driver of the horticulture increase, due to increases in export volume and average price.
The agriculture and forestry minister Todd McClay said the numbers reflected the hard work farmers had put in.
"Farmers are innovating and they're becoming more productive, but also New Zealand's reputation around the world for high-quality, safe food is increasing," he said.
The $59.9b predicted for 2024-2025 is $3b higher than was projected in the last SOPI released in December.
MPI's director-general Ray Smith.
Photo:
RNZ / Samuel Rillstone
In the report, MPI's director-general Ray Smith said tighter global production across dairy and meat, coupled with some favourable weather in New Zealand, had helped to improve export revenue.
"It's an outstanding result that surpasses by $3 billion forecasts made in December and reflects the continuing strength and popularity of Kiwi products across the world," Smith said.
Arable export revenue faced a small 1 percent decline to $340m, with processed food and other products also declining by 1 percent to $3.4b.
The arable decline was due to weak ryegrass seed demand and a poor clover season, with the report predicting next season's exports were likely to remain flat amid market uncertainty.
Overall, the report said the food and fibre sector was performing well despite "geopolitical turbulence, shifting trade policies and elevated uncertainty".
While the forecasts are higher than last year's tracking in the short-term, MPI has revised longer-term forecasts downward.
Forecast tracking in the June 2024 SOPI predicted that by 2028 export revenue would be $66.56b, but this year's predicts $64.32b by 2028.
Tariffs were cited as a contributor to the ongoing trade uncertainty, though the report expected sectors would continue to grow despite that.
"While this uncertainty may soften global demand and affect New Zealand's export performance, the food and fibre sector is generally more resilient than others, given its lower sensitivity to price fluctuations where commodities make up the bulk of our export revenue."
Agriculture and forestry minister Todd McClay.
Photo:
RNZ / Samuel Rillstone
An expected weakening in the NZD/USD exchange rate could also offset the effects of global volatility.
However, the report acknowledged that uncertainty made it more difficult than usual to achieve a consensus in economic projections.
"I think the modelling is probably on the gentler side. They're being cautious around this," McClay said.
The government has set a goal of doubling the value of New Zealand's total exports by 2034.
McClay, who is also the trade minister, remained optimistic.
He pointed to trade deals like those with the EU, United Arab Emirates and Gulf Cooperation Council which had recently come into force or were going to in the near future, as well as ongoing negotiations with India.
"I've got negotiators up there talking to them at the moment. If we can crack that market, there will be extra opportunity for Kiwis, not only in the first year but in the decades to come," he said.
"As long as farmers keep producing high-quality, safe foods, as a government we'll keep working to open the doors for them."
McClay said during recent visits to China, he had observed there was increased demand for ready meals, and that was an opportunity for New Zealand to explore further.
"They're looking for quality, they like the New Zealand story. They want to know where their food comes from, and they're willing to pay more for it."
China remains New Zealand's largest market by a significant margin, with 31 percent of all exports.
The United States is second on 12 percent, with Australia, the EU and Japan rounding out the top 5.
China led in dairy, horticulture, forestry and seafood exports.
The United States led in meat and wool exports, the EU in arable and Australia in processed food and other products.
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