New Zealand’s primary sector export revenue is expected to decline in 2012/13, as prices for commodities, such as New Zealand lamb, beef and venison, continue to come under pressure, according to a new report from the Ministry for Primary Industries (MPI).

Releasing its latest annual review of the sector, Situation and Outllook for Primary Industries 2012, MPI deputy director-general Paul Stocks noted that the prices for New Zealand’s primary industries are falling from relatively high levels but in general remain quite favourable. “Production this season has been generally good – even great for some – due to favourable climatic conditions.”

Summarising the sector, the review notes that meat and wool export revenues are expected to increase by 5.8%, to reach $7.2 billion, in the year ending 30 June 2012, owing to increased meat volumes and wool prices. Prices have been at high levels but now lamb schedule prices are falling back faster and further than the normal seasonal decline, says MPI. “This is because price-conscious consumers in Europe have shifted to less expensive meats. Some further falls are expected, but these should be modest because of lower stock numbers here and overseas.”

For beef, demand and schedule prices have held up better because of robust demand from Asian markets and falls in supply in the US and Australia.

Prices for venison have been falling since September 2011 and are forecast to bottom out in the first six months of 2012 and then rise slowly over the outlook period, reflecting decreasing supply from New Zealand and continuing demand.

The report shows that the meat sector has seen increased meat production this year as a result of favourable climate and pasture conditions.

Exchange rates continue to be of concern – and the greatest area of forecast uncertainty – says MPI.

A pdf copy of the report can be downloaded at the MPI’s website (Publications, News and Resources), where you can also order a hardcopy.