[13 December/The Country]

Agriculture Minister, Damien O’Connor, expects New Zealand’s primary sector exports are set to reach a record high over the coming year based on figures in the Ministry for Primary Industries’ latest Situation and Outlook report.  The report forecasts a 3.8% increase in export earnings for the year ending June 2019 to $44.3billion but does caution the potential for volatility on the horizon, with both Brexit and the trade dispute between the United States and China. While the medium-term implications of these events were yet to become apparent, the report notes that the risks to primary industry exports had increased. Other potential challenges included an El Nino weather pattern, labour supply, Mycoplasma bovis, climate change and shifting consumer preferences. Minister O’Connor noted that expected primary sector export growth reflects the importance of moving away from volatile raw commodity markets and into markets offering sustainable, premium returns. Dairy export revenue was forecast to rise 3.3% to $17.2 billion however, forecast price weakness in key reference commodity products such as whole milk powder, butter and skim milk powder is expected to affect New Zealand farmers. The outlook for meat and wool remains positive with strong red meat export and farm-gate prices offsetting lower volumes forecast for 2019. Edible offal, processed meat, poultry and co-products continued to add to the sector’s performance, offset by a weaker outlook for wool, carpets, hides and skins. The forecast for forestry export revenue had been revised upward by $280 million to $6.7 billion, supported by a strong first quarter for log and sawn timber exports. Horticulture export revenue was forecast to rise 12% to $6 billion.