Mixed Year on the Farm

June 17, 1997

The New Zealand agriculture sector experienced another year of mixed fortunes in 1996/97, reports the Ministry of Agriculture in its 1997 edition of "Situation and Outlook for New Zealand Agriculture", released today.

MAF says sheepmeat and beef, having been hard hit in recent years, are seeing some recovery, though demand for wool has fallen further. The dairy sector is performing well, though international markets have been less favourable. Confidence in the deer industry remains high.

Of the major horticultural industries, apples and kiwifruit continue to face tough competition in world markets. Southern hemisphere apple exports are increasing, but 1997 export prices gave reasonable returns for those orchards not affected by hailstorms. Market conditions have improved for kiwifruit, as a smaller crop and higher prices from reduced exports are expected this year

Family Farm Under Threat?

While each of the industries making up New Zealand agriculture faces particular challenges, MAF says several larger trends are discernible that affect the whole sector. The past year has seen increasing speculation about the future of the family farm in New Zealand, arising from long standing trends, notably the ever-expanding area required to form an economically viable farm unit. Editor Ronnie Horesh writes "Unlike other countries where farmers can call on agricultural sentimentalism and nostalgia to ply their cause, there is little room for sentimentality in New Zealand agriculture. The range of factors that will influence the viability of the family farm in New Zealand is a wide one, but there is now no expectation that financial support from government will be one of them."

MAF says that long term real agricultural commodity prices appear to be maintaining a downward trend -outlined in a special article "Exchange rate impacts on farm income" - and shows that income from off-farm activities is important now for many farm families.

Agricultural Production Falls …

  • The value of New Zealand’s total agricultural production is estimated to have decreased by 3% in the year ended March 1997. This was mainly the result of falls in production and prices of cattle and wool. These were only partly offset by increases in dairy output, and sheepmeat prices. Over the last two years, almost nationwide, New Zealand has enjoyed a climate conducive to excellent pasture growth.
  • In the year ending March 1998, the value of agricultural production is forecast to increase by around 1.5%, largely owing to expected increases in dairy and beef production, and small rises in wool, sheepmeat and pipfruit prices. However, volumes of wool, sheepmeat, kiwifruit and pipfruit are expected to fall.

But Revenues Up

  • Revenue for the average sheep and beef farm is expected to increase slightly in 1996/97, with gains from higher sheepmeat prices only just exceeding the effects of lower wool prices and lower beef production.
  • Average dairy farm revenue is expected to rise slightly in 1996/97, with higher production just offsetting falling milk prices.
  • Pipfruit orchard revenue for the year ending September 1997 is forecast to increase by 20% for those orchards unaffected by hailstorms. Those orchards that suffered from hail are expected to incur substantial financial losses.
  • Kiwifruit orchard revenue rose by 5% in the year ended March 1997, with higher production more than offsetting a drop in grower payments.

Situation and Outlook for New Zealand Agriculture is available from MAF or Bennetts Bookshops.

  

 

Last Updated: 09 September 2010

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