Look who’s singing the farm sector’s praises – none other than the Minister whose environmental rules constrain them

Labour ministers  are   beating  the farming  drum  (as never before).

On  stage  at  the Fieldays at   Mystery Creek, one of  the  first  out of the block (given the  absence  of Agriculture  Minister  Damien O’Connor  negotiating  free  trade  in London with the UK)  was  Oceans  and  Fisheries Minister David  Parker. 

He  was  singing  the  praises of  the  sector,  which  might have come  as a  surprise  to  many  within the  farming  industry,  who  have found  the strictures  he has delivered from his Environment  portfolio  rather  hard  to  digest.

Parker   used  the  Fieldays platform to  talk up  the sector which  he  declared had performed remarkably well in the face of Covid-19.

“NZ’s farmers, growers, fishers, processors, makers, and crafters have risen to the challenges that 2021 has presented”.

Farming exports are forecast to hit a record $49.1bn, up 3.4% over the next year, and The Situation and Outlook for Primary Industries report says by June 2025 the sector’s exports are forecast to reach $53.1bn.

This follows a 1.1% dip in total food and fibre exports for the year ending June 30.

The report shows the horticultural sector in particular had performed well. Its export revenue was forecast to hit $6.6bn, up 2.3%, by June 30. The rise has been driven by larger crops and export volumes of kiwifruit and avocados, as well as continued overseas demand for fresh fruit and wine.

Parker said challenges arising from the pandemic, including food service disruptions and shipping logistics, have been felt across several sectors with the seafood sector hit harder than most.

He  said that while the effects of Covid-19 would continue for some time, including labour shortages, work was under way to bridge the gap, including the Opportunity Grows Here campaign, to attract New Zealanders to food and fibre sector jobs.

Demand did slow considerably during the pandemic, but export volumes and prices for products such as rock lobster are recovering well. The sector has done well to navigate the challenges of the past year.

Forestry Minister Stuart Nash said the update showed the demand for dairy and forestry exports was bouncing back better than expected.

Forestry revenue was expected to reach $6.3bn this year, an increase of nearly 13%, due to higher export volumes and prices.

Export volumes of logs were also set to increase by 21.4%, attesting to the sector’s resilience, Nash said.

Forestry would also benefit from the upgraded free trade agreement with China, signed in January, which eliminated tariffs for 99% of NZ’s nearly $3.3bn wood and paper trade to China.

To  reinforce the message of the  ministers, Point of  Order  records  the  latest  Fonterra  GDT  auction has been  seen  in some  quarters  as a  soft  one,   falling for the sixth time in the past seven events with a 1.3% decline.  But this time there is kind of a silver lining because the NZD is at a two month low, so in NZ dollars the overall price rose +0.6%.  Moreover  the  auction shows  demand from food service businesses returning.

While milk powders and milk fats prices were down, anhydrous milk fat (AMF) made a small gain of 0.6% to US$5600 a tonne. AMF is used widely in the food service sector, and had become a little more profitable than butter for Oceania processors.

Prices for AMF had lifted across most contract periods, but were strongest for products due to be shipped in July, which were up 4.3%.

It has become more noticeable over the last few events that food service demand was picking up.

Despite milk powders falling in price , they continue to sit at relatively high levels. Whole milk powder prices eased to under US$4000 a tonne (NZ$5600) for the first time since March, which could increase demand from price-sensitive buyers outside of North Asia, she said.

The WMP prices had not moved less than 1% for the last five events.

The upcoming Fonterra milk price forecast is likely to sit around $8kg/MS.

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