Lower meat production in the US and EU and higher than expected prices for beef and lamb have lifted the Ministry of Primary Industries forecast export returns for the New Zealand meat sector this year by 22 percent to $6.6 billion.
Primary Industries Minister Nathan Guy released new figures today in a speech at the Riddet Institute Agri-Food Summit in Wellington forecasting a rise in primary sector exports for this year to nearly $5 billion higher than originally forecast.
The Ministry for Primary Industries has updated the Situation and Outlook for Primary Industries Forecast Update for January 2014 (SOPI).
It reveals an upward trend for agriculture, forestry, and fishing exports by $4.9 billion to $36.4 billion for the year to 30 June 2014.
“This is more economic good news, and shows how the primary industries continue to underpin the New Zealand economy,” says the Minister.
“It’s very pleasing to see dairy sector returns forecast to rise by $2.7 billion in 2013/14, and a $1.2 billion increase in meat exports over the same time.
“Growth in these sectors is being helped by rapidly growing demand in emerging markets, and supply constraints in our major competitors.
“The report shows that global demand for sheepmeat has risen as China is consuming more, and demand is recovering in the United Kingdom.”
The expected 22 percent rise in export returns for meat is down to lower beef production in the US and EU, as well as higher than expected prices for both beef and lamb, particularly to China. It means that meat sector export revenues are expected to rise by $1.2 billion above the SOPI 2013 forecast.
While the domestic sheep flock is decreasing in head count, improvements in lamb rates and carcase weights partially offset the reduction in animal numbers, says the report. Similarly, the beef herd is offsetting a fall in livestock numbers by productivity gains.
“China will continue to be a big market for lamb and beef, though exporters may try to manage exposure in this market due to ongoing trade challenges,” it notes, adding that recovery in traditional markets is set to continue.
SOPI has also lifted the forecast for 2014/2015, with meat export revenue now predicted to rise by six percent to $7.03 billion.
“As a Government we’ve set a goal of doubling primary sector exports by 2025,” says Nathan Guy. “This is another big step towards that. It will be important to build on this growth through the Primary Growth Partnership, encouraging irrigation and water storage, progressing free trade deals, new roads and Resource Management Act (RMA) reform.
A full copy of the updated SOPI report is available at www.mpi.govt.nz