The Ministry for Primary Industries’ latest Situation and Outlook for Primary Industries (SOPI) report, for the end-March quarter, paints a rosy picture of export revenue in the 2018-19 financial year.
It predicts the sector will earn $45.6 billion, up nearly 7% from the previous financial year.
The lift will come half-and-half from volume and value, assisted by a 2c fall in the value of the NZ dollar against the United States dollar.
Moreover, export revenue soared in 2017-18, up 12%, so that in just 24 months SOPI predicts the country will go from $38b to $45b annually, an 18% increase.
The biggest gainer over that period will be dairying, up $2b last financial year and another nearly $1b this year.
SOPI predicts dairying will earn $17.5b this year, up 5.5% and just under 40% of the whole.
It bases that prediction on $6.41/kg milksolids at the farmgate, including dividend, and a 3.7% increase in milk production.
In the six months to December 31 China took 30% more whole milk powder by volume than in the previous corresponding period.
But horticultural industries have the fastest growth rates and collectively are forecast to earn $6.2b this financial year, up 15% or just under $1b.
Within that kiwifruit revenue is forecast to jump 33% to $2.2b, which is about one-third of horticultural revenue.
SOPI said the apple and pear industry is harvesting an export volume of about 400,000 tonnes this autumn and with strong prices its revenue should grow 11.5% to $830m.
Wine export revenue is forecast to rise 4% to $1.8b, the US being the biggest market followed by the United Kingdom, Europe and Canada. Canadian sales are forecast to grow because of the Comprehensive and Progressive Trans Pacific Partnership.
Meat and wool are forecast to grow by 6% this financial year, up about $570m to $10.1b.
Strong international demand for lamb and beef, especially from China, cannot be satisfied by weaker production from flood-hit Australia and relatively flat supply from here.
Forestry exports are predicted to grow by 7% this financial year to $6.83b, of which logs account for $3.6b.
Sawn timber and pulp follow with about $900m each and paper and panels are about $500m each.
Seafood exports are forecast to grow 5.8% to $1.9b, of which wild capture fisheries will contribute $1.44b and aquaculture $440m.
The arable industry is the only one to suffer a fall in export revenue, down 3.2% to $235m as a result of a difficult growing season for small seeds in 2018.
Financial advantages are beginning to flow from the ratification of the CPTPP with Japan’s payments for NZ beef being the first to lift.
Trade and Export Growth Minister David Parker said Japan’s NZ beef imports rose in January threefold from a year earlier.
The CPTPP cut the tariff from 38.5% to 26.9%, which gives parity with Australia.
Butter exports to Canada jumped from 245 tonnes in January 2018 to 1606t this January and the share of our butter exports to three new trading countries under CPTPP, Japan, Canada and Mexico, had almost doubled.
CPTPP is also in effect for existing free-trade partners Australia, Singapore and Vietnam. Chile, Brunei, Malaysia and Peru had yet to ratify the agreement.
Our two-way trade with the combined CPTPP countries was $49.6b in the December 2018 year, almost a third of our total two-way trade.
