International dairy prices are forecast to sit at relatively high levels due to growing demand for dairy exports in emerging markets. Photo by Stephen Jaquiery.
Agriculture, forestry and fishing exports are forecast to
increase to $36.4 billion for the year to June, driven by
rapidly growing demand in emerging markets and supply
constraints among major competitors.
The Ministry for Primary Industries has updated the Situation
and Outlook for Primary Industries forecast for January,
revealing that those exports were forecast to lift by a
further $4.9 billion.
In releasing the figures, Primary Industries Minister Nathan
Guy said it showed how the primary industries continued to
underpin New Zealand's economy.
It was very pleasing to see dairy sector returns forecast to
rise by $2.7 billion in 2013-14, and meat exports to increase
by $1.2 billion over the same time.
The two key drivers of the forecast increases were the
rapidly growing demand in emerging markets - predominantly
China - and supply constraints among major export
competitors, largely due to diminished US and EU dairy and
The total dairy forecast for 2013-14 was now $16.69 billion.
International dairy prices would continue to sit at
relatively high levels due to growing demand for dairy
exports in emerging markets.
That ongoing growth in demand would offset the price impact
of increasing supply from the US and EU, the report said.
Export revenue from meat, pelt and wool products was forecast
to reach $6.64 billion for 2013-14, a 22.1% increase over the
forecast provided in last year's Situation and Outlook.
That was primarily due to increasing international prices and
volumes, particularly to China.
China would continue to be a big market for beef and lamb,
although exporters might try to manage exposure in that
market due to ongoing trade challenges, the report said.
Continued shortfall in beef production would keep prices up
and the increases in Indonesian quota volumes would
contribute to a good performance for the sector for 2014.
Recovery in traditional markets was set to continue, with
increasing demand in the UK for chilled lamb before the
northern hemisphere spring season.
Log prices increased by 30% in the second half of 2013 and
forestry firms were expected to take advantage of higher
international prices by increasing harvest volumes, leading
to additional growth in returns of $0.8 billion in 2013-14.