Report says dairy sector in good heart, adjusts payout forecast upward

A new report paints a rosy picture of the dairy sector, however industry leaders are still concerned about worker shortages.

The Ministry for Primary Industries has just released its Situation and Outlook for Primary Industries report.

In the report it said dairy export revenue is forecast to rise 5.5 percent to $17.6 billion for the year ending June 2019, up from 13.3 billion in 2016, 14.6 billion in 2017 and 16.7 billion in 2018. 

It said increased milksolids production translated into higher export volumes, and a reversal of declines in key dairy commodity prices at the end of 2018 continued into 2019.

Total dairy exports for the six months ended December 2018 grew 3.8 percent to $8.7 billion compared to the previous year.  

The MPI report said there continues to be strong international demand for dairy, including from China.  Dairy exports to China, as our largest trading partner, are up 16.6 percent to $3.2 billion for the six months ended December 2018 compared to the previous year.

"For New Zealand's dairy farmers, the strong production, a recovery of export commodity prices, and a weaker NZD should help ease downward pressure on farm level profitability for the current season. We have accordingly adjusted our all company average farm gate milksolids payout forecast for the 2018/19 season upwards to $6.41 (including dividend)," it said.

A skills shortage is a concern for the dairy industry, said DairyNZ's Tim Mackle.
A skills shortage is a concern for the dairy industry, said DairyNZ's Tim Mackle. Photo credit: Supplied

DairyNZ chief executive Dr Tim Mackle said it was great to see the acknowledgement of the huge part that the dairy sector plays in the economy.

However he highlighted the shortage of labour as an issue for the sector.

"To continue to achieve stellar results like this and to farm well, we need to have sufficient skilled and passionate people in the dairy sector," he said.

"At present, we have skills shortages and need more people with the necessary skills and education to help us continue to drive the sector forward and deliver benefits for New Zealanders and the economy, " said Dr Mackle.

He said the dairy sector needs around 5000 new people each year.  

"It is critical that while there are not enough New Zealanders to fill vacancies that the sector can have access to migrant employees."

"Migrant employees are valued members of our farm teams. We want to work with the government to ensure that businesses can plan knowing they have certainty of labour supply."