|Agriculture & the Recovery
Every sector of the New Zealand economy has been affected by coronavirus, and for the vast majority, the economic impacts have been severely negative. Businesses are closed, tourism is non-existent, and goods are moving through borders at a much slower rate than normal. In times like these, New Zealand is forced to rely on its most traditional and resilient industries, with a healthy dairy trade central to getting our economy back on solid ground.
In the most recent data, the Global Dairy
Trade did not follow other primary industry sectors on their downhill path.
There was actually a 1.2% lift in whole milk powder (WMP) over the month, which
has been largely welcomed after negative results at the start of the year.
There were mostly strong results in other monitored products, including a lift
of 4.5% for butter and 0.2% for cheddar cheese. The benchmark average dairy
price sits at US$2,969, however, which is still below the US$3,000 mark needed
to achieve viable farmgate prices.
The NZ government recently announced the
dairy market as the nation's biggest export earner. The overall industry is
worth close to $19 billion a year, with dairy farmers generating around 8% of
total exports to 140 countries around the world. As the largest economic
powerhouse in the country, annual exports include whole milk powder at $6.7
billion, butter at $2 billion, cheese at $2 billion, anhydrous milk fat at $1.6
billion, casein at $1.4 billion, and skim milk powder at $1.2 billion. Other
dairy exports such as fresh milk, yoghurt, and infant formula made up a further
There are 46,000 people employed by the
dairy sector, with each person bringing in the equivalent of $350,000 in export
earnings. While the dairy industry is affected by coronavirus, the essential,
primary, and geographical nature of the industry puts it in a fairly good place
for the coming months. While domestic and global economic conditions will
undoubtedly take a big hit, and unemployment and debt repayments could be an
issue for parts of the industry, the underlying strength of dairy and other
primary sector exports will be crucial for New Zealand's forward momentum over
the coming months and years.
The release of recent figures comes at a
time when dairy farmers across New Zealand have banded together to send a
positive message to the rest of the country: "Of all the countries that
could run out of food, New Zealand is not one of them. Our farmers are world
leading and we’re damn good at what we do – producing high quality food. We
have strong supply lines and we’re all working hard to keep food on the table
for your family and for ours. New Zealand dairy farmers produce enough for 100
million people. You’re in good hands New Zealand."