The outlook for New Zealand's agriculture, forestry and seafood sectors, while still strong, has weakened slightly since the release of the annual Situation and Outlook for New Zealand Agriculture and Forestry (Sonzaf) report in June.
That was a result of continuing challenges in some overseas economies, causing a mark-down of export revenue expectations for dairy, forestry, meat and wool of $930 million or 3.5% for the year to June 2012.
Maf has released a half-year update which shows climatic conditions in spring were favourable for milk production and lambing, and overall pastoral production for the 2011-12 season was expected to be above average. International dairy prices were falling from their recent peaks around February, due to increasing supply from major dairy exporting countries and sluggish demand from major importers such as China.
Based on recent GlobalDairyTrade results, prices were expected to stabilise in 2012, although the euro zone debt crisis posed risk.
New Zealand dairy export revenue was forecast to reach $13.6 billion in the year to June 30, 2012, a significant downgrade from the $14.6 billion forecast in Sonzaf but, if achieved, still the largest annual export value.
Maf expected milk solid production to increase by 5.1% on last season assuming normal climatic conditions throughout the remainder of the season.
Meat and wool export revenue was expected to reach $7.43 billion in the year to June 30, 2012, higher than the $6.97 billion estimated in Sonzaf, due to higher expected prices for wool and pelts.
The New Zealand lamb schedule price for the year ended September 30, 2011 was at the highest level in inflation-adjusted terms since 1977, due to lower global lamb export availability, especially after the poor lamb crop in 2010.
Lamb export revenue was expected to increase 9% to $2.65 billion in the year ending June 30, 2012, due to higher export volumes. This spring's lamb crop was estimated to be 7% up on last year.
Wool export revenue was expected to increase 19% to $848 million in the year ending June 30, 2012 due to higher prices.
Forestry export revenue for the year ending June 30, 2012 was expected to be $4.26 billion, down from the $4.69 billion forecast in Sonzaf due to lower forecast prices.
Log export volumes have fallen back in recent months from the peak levels reached early this year. That was after several years of phenomenal growth in sales, especially to China.
Log inventory levels in Chinese ports were high and Chinese buyers were slowing down log purchasing in response to the Government's tightening monetary policy.
Log demand from Japan was expected to increase as the Japanese earthquake reconstruction started, while demand from South Korea was also expected to increase, to take advantage of off-peak log prices.
Kiwifruit production in 2012 will be significantly affected by the bacterial disease psa.
Export volumes were expected to fall 21% to 89 million trays and export returns were expected to fall 18% to $862 million for the year ending March 31, 2013.