Primary sector returns strengthen export-led recovery

Farmers’ hard work in leading New Zealand’s export-led recovery from COVID-19 is being rewarded with high prices forecast for milk and very strong returns for meat, says Trade and Export Growth and Agriculture Minister Damien O’Connor.

Fonterra announced today a record predicted milk price of $7.90 to $8.90 for the coming season. The mid-point of $8.40 would match the previous record set in 2014. The announcement follows continuing high demand for NZ-grown meat.

“Our farmers and growers have been working hard maintaining their volumes and together, through the COVID response, we’ve been able to keep supply chains ticking and freight links open,” said Damien O’Connor.

“The resilience of all export sectors is vital to our ongoing economic strength. Just as we aim to have diversified export markets, we’re also focussed on growing all our export sectors.”

Damien O’Connor said ongoing strength in prices was positive for farmers.

“For example, red meat exports increased by more than a quarter in August compared to the same month last year.

“Overall exports for August reached $650 million with the 26 per cent increase largely driven by higher beef exports, up 39 per cent to $299m year-on-year.

“In July, mutton prices hit $6.40 per kilogram, setting a new record high. They lifted further in August to reach $6.60 per kg. In September, lamb prices hit $9.40 per kg, and are predicted to remain high into next year.

“The Government is committed to helping all exporters through high-quality trade deals, such as last week’s announced FTA with the UK, and our continuing negotiations with the European Union on an FTA.

“Dairy and red meat exports to the UK will enjoy significant tariff-free quotas from day one in a market that we’ve effectively been locked out of for decades.”

Damien O’Connor said consumers increasingly wanted high-quality products with strong animal welfare and environmental credentials.

“Today’s milk price announcement shows farmers and rural communities are working hard and overseas consumers see our products as produced to a high standard. We have to protect that reputation.

“That’s why the Government is working with the sector through its Fit for a Better World programme to support farmer catchment groups, back research into better farming practices and focus on adding value to the products we export,” Damien O’Connor said.