Recent Study: New Zealand Agribusiness Report Q3 2014

From: Fast Market Research, Inc.
Published: Tue Jun 03 2014

BMI View: We believe that increased access to international markets, particularly Taiwan and China, will prove to be the prime growth driver for the agribusiness sector in New Zealand over the medium- to long term. This will be supportive for both the dairy and the livestock segments. The dairy sector in particular will benefit from export demand growth, as many other countries in Asia are facing growing domestic demand and relatively limited production capacity. However, we also warn that vulnerability to weather conditions, lack of skilled labour, tightening regulations and the consequent increase in operating costs could dent growth prospects.

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Key Trends

* Milk production growth to 2017/18: 14 % to 22.2mn tonnes. Given the small domestic consumption base and the high productivity of the sector, long-term expansion will mainly come from export opportunities, particularly to Asia and the Middle East, which are forecast to enjoy significant dairy consumption growth over our forecast period.
* Milk powder production growth to 2017/18: 18% to 1.5mn tonnes. Across all the dairy segments, export opportunities (particularly to China) will be the main growth drivers over the medium term.
* Beef production growth to 2017/18: 3.2% to 671,000 tonnes. The dairy sector will continue to limit the amount of cattle available for slaughter.
* 2014 real GDP growth: 2.7% (down from 3.5% expected in 2013; forecast to average 2.5% from 2014 until 2017).
* 2014 consumer price inflation: 2.1% (up from 1.1% in 2013; forecast to average 2.4% from 2014 until 2017).

Key Developments

The New Zealand dairy sector had a strong year in 2013/14 (which began in June 2013), with production estimated to have increased by 5.0% to 20.5mn tonnes. The sector benefited from improved rainfall in late 2013 and early 2014, as well as strong profit margins due to high prices. In particular, forecasters are expecting adequate rainfall for most producing regions, particularly in southern...

The New Zealand Agribusiness Report features Business Monitor International (BMI)'s market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.

BMI's New Zealand Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.

Key Benefits

* Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
* Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.

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