Food and fibre celebrate fabulous

Neal Wallace NEWS Food and fibre

THE food and fibre sector is confident it can build on the record export earnings it will achieve this year.

The sector is on track to achieve a 6% increase in export earnings in the year to June 30, expected to achieve a record $56.2 billion driven by improvements in dairy, horticulture and seafood.

Releasing the latest Ministry for Primary Industry’s Situation and Outlook for Primary Industries (SOPI) report this week, Agriculture Minister Damien O’Connor said that performance was achieved despite summer storms and the global legacy of covid.

Despite challenges in global markets from high inflation, the red meat sector continues to underpin NZ’s economy.

Sirma Karapeeva Meat Industry Association

Simon Tucker, Fonterra’s director global sustainability, stakeholder affairs and trade, said the positive outlook for New Zealand dairy exports broadly aligns with the co-operative’s long-term outlook.

“In the short term globally we are seeing softened demand for

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Shaw acknowledged the uncertainty around what was counted and what was not for carbon absorption.

“We want to make sure all valid, scientifically proven types of sequestration are recognised.”

The issue has been a gap between what NZ recognises within its greenhouse gas inventory, versus NZ’s targeted gas volumes that are used for dairy at a time of balanced supply.

“The reduced short-term demand, particularly from China, has had an impact on our 2022-23 forecast farmgate milk price,” he said.

Tucker said Fonterra expects demand to gradually strengthen through 2024 as China’s economy continues to recover from covid.

A horticulture spokesperson said that while welcoming the report, adverse weather and rising costs are placing the industry under extreme pressure.

Meat Industry Association chief executive Sirma Karapeeva said despite challenges in global markets from high inflation, the red meat sector continues to underpin NZ’s economy.

Meat prices have come off record levels and Karapeeva said the sector is waiting for a recovery of China and United Kingdom markets in particular.

Hamish Gow, a professor of Agribusiness at Massey Business School, said the result reflects the recovery in food service, but questions remain about the global impact from post-covid recession and changes to consumer habits, such as eating more at home.

The SOPI report found dairy was the strongest performer for the year to June 30, generating a record $25.1bn in export receipts, up 14% on last year, due to strong sales of infant formula.

This performance was achieved despite a 0.2% decline in milk volume.

Softer markets in China underpinned a 3% dip in meat and accounting in the likes of the Paris Accord.

“Most countries we compare ourselves to have no gap between the two. There is stuff the atmosphere ‘sees’ which we do not count currently under the likes of Paris commitments, which could be counted in future.”

He confirmed this looked very positive for farmers with additional vegetation, and if it could be scientifically validated as wool receipts to $11.9bn and a 1% drop in forestry to $6.5bn.

A bumper wine selling season helped lift horticulture revenue 2% to $6.9bn, offsetting lower returns from kiwifruit, apples, avocado and vegetables. Arable returns eased 3% to $245m due to lower demand for ryegrass seed while processed food revenue was up 6% at $3.4bn, boosted by demand for food ingredients and chocolate.

Figures from LIC and DairyNZ show total dairy cow numbers are 1.2% lower than last year at 4.8 million, with the total number of cows estimated to have decreased 176,000 since peaking in 2014/15.

Similarly the farmed area has sequestrating vegetation, it could be included in future.

Shaw also confirmed his commitment to having farmers’ efforts on pest and predator control acknowledged as a positive contribution to carbon sequestration on farm.

“I am personally 100% committed to seeing that incentive. You can imagine a world where you get carbon credit for clearing pests and predators out of bush, and adding 10% to the fallen 12,000ha between 202021 and 2021-22 to hit 1.7 million hectares.

The report predicts this trend will continue over the next few years due to tighter regulations relating to freshwater, winter grazing and fertiliser usage.

Kiwifruit and wine led the horticulture improvement, with increases of $2.6bn to $2.8bn in the last two years, and $1.8bn and $1.9bn, respectively.

But two challenging years have been capped by a poor summer for kiwifruit, with volumes of Green down 23% and prices 2% lower this summer, and Gold down 11% due to a lower than average bud break and weather losses.

Yields for green varieties for the biomass of forest, that should be recognised.”

Langford said after six months of inaction, HWEN is “back on” but he added that the parties “are working on a different conversation”.

He said all parties have agreed to commit to the partnership and to deliver NZ’s commitments to climate change.

The agreement is for a farmlevel split gas approach, with measurement and reporting to be by a standardised measuring and recording system, which will be available by 2025.

CHEERS: A bumper wine selling season helped lift total horticulture revenue 2% to $6.9 billion.

2023-24 season are likely to be a further 15% lower than last year.

Wine export returns are next year forecast to overtake kiwifruit, earning $2.5bn compared to $2.4bn.

But it will be short lived, with kiwifruit regaining momentum by 2027, earning $3.7bn and wine $2.6bn.

Wine keeps going from strength to strength, with revenue in the current year increasing 29% due to a massive harvest in 2022 and resilient pricing.

Marlborough yields are expected to return to long term averages next year, causing revenue to fall 2% due to production dropping from a record 532,000t this year to 491,000t in the 2023 vintage.

Langford said the partners have also committed to ongoing investment in research and development, education extension and technology uptake. The parties will seek to resolve issues around emission pricing which includes “equity, timing and price levels”, and to also validate recognition of carbon sequestration scientifically.