The latest Ministry for Primary Industries situation and outlook report said primary sector export revenue grew $4.5 billion in the year to June 2018 to $42.6b.
It was led by 13.6% growth in dairy to $16.6b, 12.4% in meat at $9.4b and 15.8% from forestry to $6.4b.
MPI paid tribute to the ongoing resilience of farmers saying that fortitude will help the sector continue to grow.
It forecast growth of between 1.2% and 2.6% from 2019 to 2022, at which point primary sector exports will exceed $46b.
“Production and export volumes are forecast to be relatively stable, particularly in dairy and meat and wool, where constraints on production expansion exist.”
Dairy growth in the year to June 2018 was led by high butter and whole milk powder prices and growth in infant formula reaching $1.2b, up 53% on the previous year.
A modest 0.5% increase in dairy production is forecast for the coming year driven by onfarm productivity and growth in the price of butter, infant formula and skim milk powder.
High prices for lamb and mutton are expected to ease in the coming year due to the rebuilding of the Australian flock and some price resistance from consumers.
A record harvest and higher demand for logs, especially from China, underpinned forestry growth but the report warned high inventory levels might indicate softening demand.
China accounted for 75% of export log revenue and 47% of all forestry exports last year.
Horticulture export returns have lifted 55% in five years to $5.5b, with kiwifruit exports last year growing 12% on high yields and demand for the Gold variety. MPI said kiwifruit exports could reach $2b next year.
Wine exports last year grew 3.6% to $1.7b, apples and pears 10% to $780 million, arable 11.6% to $220m despite a difficult growing season and honey $352m, up 7.3%.
The reliance on the Chinese market was marked. It took 26% of all primary sector exports, a sixfold increase in the last decade.
MPI said dairy, meat and forestry have benefited significantly from the removal of tariffs following the 2008 free-trade agreement with China but other exporters have also enjoyed phenomenal success.
“Kiwifruit exports have grown from $16m to $374m while apple and pear exports to China have increased from $1m to $49m since 2008.”
Exports of infant formula and cheese have recorded annual growth of 33% and 25% respectively in China over the last 10 years, beef exports have risen from $1m to $577m and honey exports from negligible levels to $81m.
The primary sector accounted for 79% of merchandised exports, up from 72% five years ago, employed 15% of the country’s workforce and in 2016 contributed 11% of GDP.
