South Island benefits from strong dairy and wine growth

7 August 2008

The Ministry of Agriculture and Forestry (MAF) says the South Island agricultural sector is benefiting from strong growth in the dairy and wine industries.

MAF has released its Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF) 2008 report.

Presenting on SONZAF in Christchurch today, MAF Director-General Murray Sherwin said the report points to significant changes in South Island agricultural production. The most marked change has been a southern shift in the dairy industry.

The South Island dairy herd grew by 13% last year and continues to drive national dairy herd growth. The South Island now accounts for more than 30% of total dairy cattle numbers in New Zealand.

Mr Sherwin said the strong growth in South Island dairy herd numbers has come largely at the expense of lamb finishing, which has struggled with the impact of drought, a high dollar and weaker prices.

South Island regional economies look set to benefit from projected continued growth in dairy returns and also an improved outlook for meat and wool export returns over the next five years.

South Island wine growing regions are also benefiting from a bumper wine harvest likely to push national export wine volumes up by 30% this year.

The area of producing vineyards in the South Island has grown by 19% each year since 2000 and nearly two thirds of New Zealand's producing vineyards are in the South Island - mostly Marlborough.

Wine now earns more than wool in export returns and wine industry earnings are projected to increase to $1.3 billion by 2012.

The South Island's arable sector is another projected to profit from strong international commodity prices.

Copies of the report are available on the MAF website at http://www.maf.govt.nz/SONZAF/2008

ENDS

For further information contact:

Deidre Hill
MAF Communications
Tel: 04 894 0192, 029 894 0192

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