Primary sectors ride out recession: MAF report

New Zealand’s primary sectors have ridden out the global recession remarkably well, according to the annual Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF), launched in Wellington today.

The Ministry of Agriculture and Forestry (MAF) report looks at issues facing the primary sectors currently and forecasts the trends over the coming three to five years.
It shows many sectors including meat and forestry will see steady increases in returns over the coming few years to 2013, while dairy will improve on the current pay-out without getting to the record levels of 2007/08.

MAF Director-General Murray Sherwin says while SONZAF 2009 represents a forecast downgrade for 2009/10 it is by no means all doom and gloom.

“One of the universal truths in the world is that people will always need feeding, so with the global population continuing to grow, demand for food products will also increase.
“That said, New Zealand producers will need to be alert to market demands and changes in global trading conditions if they are to make the most of the opportunities offered by a growing world.”

Mr Sherwin says the dynamic nature of global trade will continue to affect New Zealand producers, in both negative and positive ways.

“Many producers need to concentrate on innovation and productivity gains so they can take advantage of the rewards to be had in emerging markets.

“In traditional markets such as the EU and US, recession-hit economies are expected to reduce spending and continue to protect domestic suppliers.

“A good example of how this can work is in the apple industry. The predominant varieties of apple exported have changed to meet demand in new markets such as Japan and Korea, with a resulting improvement in profitability, while the proportion of older varieties bound for Europe and North America has declined.
“The exchange rate played a role in insulating New Zealand from some of the effects of the global recession. The value of the Kiwi dollar against major currencies will be key to determining the value of exports in coming years,” Mr Sherwin says.