Farmers are welcoming a jump in predicted primary export returns.
The Ministry for Primary Industries is forecasting the sector will earn $36.4 billion from exports in the year to June, nearly $5 billion more than was forecast six months ago.
20131009. Photo Diego Opatowski / Radio NZ. Generic beef cattle in a field. Photo: RNZ
A record-breaking drought in 2013 was rough on farmers, so the forecast boost in exports is being celebrated.
Primary industries minister Nathan Guy told a Riddet Institute agricultural summit at Te Papa national museum in Wellington on Thursday that dairy and meat returns are booming.
Mr Guy says the leap in returns can be attributed to two key drivers: the increasing volume of exports going to China and reduced dairy and beef production in the United States and Europe leading to a lack of supply and rising prices.
Bay of Plenty dairy farmer Wilson James says the boost is badly needed after three poor seasons and will benefit everyone - not just farmers.
Federated Farmers says demand for sheep meat has risen in China and is recovering in the United Kingdom.
The federation says the news is good but, as with any prediction, it should be treated cautiously.
An agricultural consultant, however, warns the forecast upswing could lead to higher meat and dairy prices.
Agricultural consultant James Anderson says while it is welcome for farmers, prices could rise and where prices do push up, consumers will switch to other protein products.
Mr Anderson says producers will be aware of that risk and do their best not to create a procurement war.
