Bayleys Canterbury Country Collection Edition 3 2019 | Page 7

THE PRIMARY SECTOR’S CONTRIBUTION TO NEW ZEALAND’S WEALTH CREATION
HAS CONTINUED TO REMAIN STRONG AS GLOBAL DEMAND FOR QUALITY, HIGH
END FOOD PRODUCTS KEEPS GROWING
Whether it is lamb loins for China, Manuka honey for the
United Kingdom or chilled grass-fed Wagyu to California,
New Zealand producers continue to punch above their
weight on the world stage as another farming season
approaches its close. Bayleys national country manager Duncan Ross says
these figures do much to dispel any uncertainty about
New Zealand’s future as a high quality food source for
the increasingly wealthy, health conscious middle classes
emerging through China and Asia in general.
Running an eye over MPI’s definitive Situation and Outlook
for Primary Industries report for March is a good reminder
about how healthy the primary sector actually is. “It seems the greater challenge for the primary sector lies
very much here at home. On farms and orchards many in the
primary sector may feel somewhat under siege by compliance
demands, calls for nutrient reductions, green-house gas
issues and the spectre of a capital gains tax hanging over their
businesses.”
Expectations are for dairy revenue to lift by 5.5% on last year’s
healthy returns, to total a near record $17.7 billion for the year
ended June. That has been helped by a sustained period of
relatively consistent weather aiding grass growth, and helping
keep production levels up. But there has also been a welcome
turnaround in key dairy commodity prices at the end of last
year.
Similarly meat and wool income is expected to be 6% up on
last year, topping $10 billion in export earnings this year,
driven largely by the higher prices being paid for sheepmeat.
China in particular is exhibiting an almost insatiable demand
for New Zealand lamb and mutton, with prices holding firm
even through peak supply periods.
Horticultural revenue also continues to grow, this year up
a massive 16% on last year as it pushes over $6 billion in
export earnings, with anticipated increases in apple, kiwifruit
and wine exports, a result not only of higher prices but also
increased plantings in both apples and kiwifruit.
Meantime forestry has become the quiet performer, gaining
an additional 7% in earnings this year to head off horticulture
with $6.8 billion in earnings.
The innovative, emerging area of other primary sector foods
is also starting to be recognised as products like Manuka
honey, craft beer, health products and confectionary all
contributed to the “other” sector that now totals $2.8 billion,
up 3.5% from last year.
Collectively the primary sector is contributing an additional
$3 billion to the economy this year, on average up 6% on
last year, a figure that only a couple of years ago would have
equated to the entire horticultural sector’s exports.
A weakening NZ dollar has also helped deliver an added fillip
to returns, falling throughout the year, with an average trade
weighted index for the June year end forecast to be 2% lower
than last year.
The report’s authors also note the primary sector’s
performance is even more impressive given the trade
tensions swirling around key markets of United States and
China.
But when the attention grabbing headlines are pushed aside it
is possible to see some highly constructive, progressive work
being done to address all these issues, often at a level well
beyond any other sector in the economy.
“Green-house gases are a good example. There are 12
demonstration farms running around the country that are all
collecting and compiling data to provide farmers with tools
to manage emissions – we have already seen one example in
Cambridge on Owl Farm at St Peters school where emissions
are down 14%, the same amount as the reduction in nitrogen
losses, while profit is up 14%.”
The farm has developed a matrix of parameters including
nitrogen losses, gas emissions, animal welfare, staff welfare
and profitability to monitor its performance, and is starting
to meet its goals across all those parameters.
The move to try and better manage green-house gas losses
is also being matched by one of the most advanced research
programmes in the world, with the Pastoral Greenhouse Gas
Research centre working on developing a vaccine or bolus
suitable for New Zealand’s pastoral animal system.
Centre head Dr Harry Clark has pointed out that had farming
made no progress on gases it would be emitting 30% more
per kg of production than it currently is. The sheepmeat
sector in particular has made huge strides, producing almost
the same amount of red meat from half the number of sheep
run 20 years ago.
“The primary sector’s success in addressing those issues
of GHGs and nitrogen losses should be applauded - we are
talking issues that have only become really topical in the
past 8-10 years, and the sector has made huge strides in
addressing them, in very short time. There’s still a way to go,
but critics may do well to look harder before throwing rocks
at farmers’ efforts,” says Ross.
Source: bayleys.co.nz/rural-insight