The Ministry for Primary Industries increased the tempo with its outlook for the primary sector predicting a 17% increase in agricultural exports to $41.3 billion between now and 2019.
It even predicted dairy receipts to increase by a compounded annual rate of 6.8% from now to 2019.
AgriHQ senior dairy analyst Susan Kilsby also suggested an improving rhythm for the dairy sector with returns this season improving $1.8b on last season.
And Primary Industries Minister Nathan Guy returned from his European tour singing the praises of opportunities for collaboration with the European Union to increase sales to emerging markets.
AgriHQ expects milk production will continue to grow in the 2015-16 season despite the tough financial conditions farmers are facing
The AgriHQ NZ Milk Production Predictor forecasts growth of about 2.5% this season though the ministry forecast a 1.3% reduction.
“Dairy farmers will be looking to mitigate the impact of low farmgate milk prices by maximising production at minimal cost,” Kilsby said.
“There is no doubt that 2015-16 will be a challenging season that will test farmers’ skills in terms of both financial management and physical management of their farming businesses.
“We expect farmers will focus spending solely on inputs which will put more milk in the vat.
“The combination of increased milk output plus a higher milk price forecast for 2015-16 is estimated to bolster the NZ economy by NZ$1.8 billion.
“There will be a lag in this flowing through the economy as milk payments to the end of 2015 are negatively affected by the very low milk price from the 2014-15 season and the relatively low advance rates this season.”
MPI said the pace of dairy export growth was expected to rise from 2016 on resulting in revenue of $18.4b in the year ending June 2019.
It said the meat, horticulture, seafood and other sectors had grown strongly in the last year despite challenging conditions and had partially offset the dairy downturn.
Prospects in the next four years for key markets in China and southeast Asia were particularly encouraging.
It expected beef prices to remain strong to 2017, sheep meat and co-products to recover from 2017 and steady growth in wool revenue.
Forestry prospects were positive for log and timber exports to China medium term with potential for growth in sales to the United States.
In horticulture kiwifruit would experience a strong recovery from Psa and there were positive signals for price gains and markets expansion for wine, apples and pears.
The aquaculture and arable sectors were also likely to increase earnings and there were opportunities for strong growth for other agricultural sectors through Asian demand for processed foods and honey.
MPI also expected advantages to come as the dollar continued to soften against the greenback and exporters enjoyed improved market access through free trade agreements though dairy price volatility was expected to continue in the short term.
On his return from France, Italy and Poland Guy said there were opportunities for NZ and the EU to work together through investment in each other’s dairy sectors and developing shared global value chains to make the most of emerging markets.
He met leading European producers who had invested in NZ and Kiwi producers who were investing in Europe.
“The consensus amongst these leaders was that there are significant benefits from collaboration between European and NZ producers.”
If all the optimistic predictions come true farms will greet them with a chorus of Hallelujah.
