Meat & Livestock News

2024: A Testing Year for New Zealand’s Agricultural Exports

The combine delivers threshed grain to the truck. Harvest season in agricultural fields. Harvest in the south of Ukraine.

The Ministry for Primary Industries’ recent Situation and Outlook for Primary Industries (SOPI) report casts a somewhat sombre shadow over New Zealand’s agricultural export outlook for 2024. The report, a detailed analysis released last week, projects a 5% decline in the overall value of the nation’s primary exports, expected to fall from 2023’s $57.4 billion to $54.3 billion.

In the dairy sector, traditionally a linchpin of New Zealand’s export economy, a downturn is anticipated. Revenues are forecasted to drop by 7%, reaching $24.1 billion. However, the latter part of 2024 might bring some respite with an expected upturn.

The meat and wool sectors are also bracing for a downturn, with a projected 5% decrease in revenues, amounting to $11.6 billion. Yet, there’s a hint of recovery in the subsequent year.

Forestry, another key sector, faces a particularly challenging year ahead. The SOPI report indicates a 9% reduction in revenue, bringing it down to $5.8 billion. The long-term outlook for this sector remains uncertain.

In contrast, the horticulture sector, despite grappling with severe weather challenges, stands as a beacon of resilience. With only a 1% dip in revenue to $7.0 billion, its prospects for 2025 appear bright. This sector, along with arable farming, has played a crucial role in buffering the impacts felt by other sectors.

MPI Director-General Ray Smith has succinctly described the primary sector’s current predicament as navigating a “confluence of global events.” These challenges, ranging from the ongoing impacts of the Covid pandemic to international conflicts, have significantly tested New Zealand’s primary producers. Compounding these are the effects of rising inflation and cost of living, which have dampened consumer demand, notably contributing to a market slowdown in China.

Despite the current headwinds, it’s important to contextualise these challenges within the sector’s recent history of growth, which saw primary exports rise from $46.3 billion in 2019 to $57.4 billion in 2023. Dairy has been a standout performer during this period.

The lamb market, however, is currently contending with an oversupply of Australian lamb and a dip in consumer demand.

The horticulture sector, despite facing two challenging harvests in 2022 and 2023, is looking forward to a promising harvest in March 2024, weather permitting. The apple and pear industries, though weather-affected, are also poised for positive growth in the coming years.

The report also underscores the primary sector’s vital role in New Zealand’s economy. It’s a sector that encompasses 70,000 enterprises, employs 358,000 individuals, and contributes approximately 16% to the nation’s GDP.