Meat and wool export revenue is forecast to reach $10.1 billion for the year ending June 2020, according to the latest Situation and Outlook report for the Primary Industries (SOPI) to the end of June.
The report notes prices for red meat products are expected to remain at near-record highs for the near future, supported by strong demand from China for all types of meat and constrained supplies globally. Beef prices have been strong since 2015 and sheepmeat prices over the past two years, it notes. At the same time, exportable supplies remain constrained, with the long-lasting drought in Australia limiting their beef and sheep production.
SOPI forecasts meat and wool export revenue to reach $10.1 billion for the year ending June 2020, a one percent fall from the previous year, due to a slightly lower production outlook. Beef production is forecast to fall to 676,000 tonnes. New Zealand’s beef and veal exports to China have doubled over the past year from $639 million to over $1.2 billion in the year ended June 2019, becoming New Zealand’s largest export destination.
Overall, New Zealand’s primary sector exports continue to surpass expectations with revenue up 8.7 per cent on the previous year, reaching a record $46.4 billion in the year ended June 2019.
“This latest report shows some absolutely outstanding, record-breaking results,” said Minister of Agriculture and Minister of State for Trade and Export Growth Damien O’Connor.
“Total dairy export revenue is up 8.7 per cent to $18.1 billion. That’s a $1.47 billion increase, which is just staggering, and the sector appears to be set up for another favourable production season.
“For the year ending June 2020 horticulture revenue is forecast to rise 3.8 percent, seafood exports is expected to rise 5.5 percent, meat and wool prices remain near record highs with strong international demand and prices for red meat products are expected to remain at near-record highs for the near future,” he says.
“Our nation’s farmers and growers produce some of the highest quality food in the world – and the world knows it. They are bringing home record export returns and that’s something for them to be really proud of. I’m certainly very proud of them,” says O’Connor, adding the Government is committed to supporting and partnering with the primary industry.
He acknowledged New Zealand is a trading nation and said the Government has an ambitious trade agenda.
Last week the Minister was in Thailand attending a Regional Comprehensive Economic Partnership (RCEP) Ministerial meeting, as negotiations enter the final stages.
“When concluded, the RCEP Agreement will anchor New Zealand in a regional agreement which covers 16 countries, almost half the world’s population and markets that take more than half our total exports. It will also provide us a free trade relationship with India, a fast-growing economy with a GDP of more than $2.6 trillion in 2018,” he said.
Trade negotiations with the EU and updating New Zealand’s FTA with China are also priorities.
“Outside of our trade agreements, the Government is also working with New Zealand exporters to help resolve specific barriers to trade that they might face in overseas markets.
“While export revenue for the season that’s just started is forecast to drop by about half a percent, prices are expected to stay high for most products.
“To our farmers and growers I say – you are the backbone of our economy are you’re at the heart of our rural communities. This Government appreciates you and we’re behind you. These results are down to your hard work – congratulations”.
The latest Situation and Outlook for Primary Industries is available here.