Primary exports set to beat $52b mark

Primary industry exports are on track to reach a record $52.2 billion for the current financial year.

The Ministry for Primary Industries Situation and Outlook for Primary Industries Report forecasts export revenue will climb 9 per cent year-on-year by June 30.

It will be the first time primary industry exports have reached the $50b mark.

Dairy export revenue is forecast to increase by 13 per cent to $21.6b. Meat and wool exports are forecast to rise 18 per cent to $12.2b and horticulture is up 2 per cent to $6.7b. .

After a couple of tough years due to Covid disruption seafood export revenue is forecast to increase nine per cent to reach $1.9 million.

"Seafood exports have increased with food service reopening and demand rebounding," the report said.

"Growth has been due to strong export performance across key species, although the sector is not without its challenges.

"Higher fuel prices, logistics constraints and higher costs of shipping are creating uncertainty over the outlook period."

Not all sectors had seen exports lift. Forestry export revenue is forecast to be down 4 per cent to $46.2b, the decline is mostly driven by lower export volumes, despite higher prices, as well as a record harvest in the year prior.

"Fewer logs were exported due to freight congestion and ongoing uncertainty, putting profits at risk as producers pay for delays.

"Domestic timber demand is currently elevated due to high growth in residential housing, lowering export volumes as more wood is consumed domestically."

And arable export revenue is expected to be down 2 per cent to $255 million due to a challenging season.

MPI director-general Ray Smith said it had been a tough couple of years but the food and fibre sector had adapted to continue strong exports.

"This clearly shows the ongoing economic success of our food and fibre sector and is only possible through the hard work and commitment of the sector to keep their operations running throughout the pandemic."

Agriculture Minister Damien O'Connor said beating $50b mark was a tremendous result.

"Farmers, growers and others in the supply chain have played such a critical role in our economy.

"They have continued to deliver quality products for Kiwis and overseas consumers while navigating global disruption and uncertainty.

"Our markets abroad are demanding high-quality products that are made with care, and this report indicates our exporters are responding to these market signals."

O'Connor said export revenue should continue to rise with many companies shifting to a value-over-volume approach.

Looking to the year ahead, food and fibre sector export revenue is forecast to remain steady at $52.1b with strengthening export revenue in horticulture and forestry sectors partially offsetting weakening export revenue in dairy, meat and wool, seafood, arable and processed food and other products sectors. But it's expected export revenue will rise to $56.8b in the year to June 30, 2026.

The report said the food and fibre sector accounted for 11 per cent of New Zealand's GDP and employed 367,.000 people. -RNZ