Farmers and growers are feeling the uplift from stronger returns, a more stable policy environment, and improved seasonal conditions. Photo / 123RF
Over the past 12 months, New Zealand’s agriculture sector has staged a remarkable resurgence. Farmers, growers and agribusinesses have reaped improved returns across key commodities — dairy, beef, and kiwifruit — buoyed by market optimism, banking support, and global conditions.
Primary exports are set to reach almost $60 billion in the year to June 30, 2025—a 12% uplift from $53.3 billion the previous year. This marks a “blockbuster year” for our agricultural economy. Farm confidence has notably recovered. Tracta’s AgriPulse highlights lifted optimism as dairy, beef, lamb, wool, and horticulture prices surge. Encouragingly, these trends appear sustainable, with market sentiment underpinned by sound fundamentals.
Global dairy supply remains in an approximate balance, propelling New Zealand’s farmgate milk prices to record levels for the 2024–25 season. Dairy production is up 2.8% year-on-year and BNZ has worked closely with dairy farmers to optimise cashflow and investment. With dairy returns forecast at around $27 billion — a 16% increase on last year, farmers have capitalised on the strong payout environment both through early debt repayment and undertaking capital upgrades.
New Zealand’s beef sector has enjoyed a standout year, underpinned by resurgent global demand and premium positioning in key export markets. Farmgate prices have surged to levels 35–45% above the five-year average, reflecting strong international appetite for sustainably produced, grass-fed meat. Tariff noise aside, the United States, in particular, has ramped up imports, with New Zealand significantly increasing its share of US beef supply. China and Japan have also shown renewed interest in lean beef cuts, creating diversified market opportunities. On-farm, producers have responded by focusing on efficiency and quality — optimising genetics, refining finishing systems, and improving pasture resilience. With export volumes rebounding to pre-Covid levels and market fundamentals remaining favourable, the beef sector is well-positioned to maintain momentum into 2026.
After two challenging seasons marked by labour constraints and weather volatility, New Zealand’s kiwifruit sector has bounced back with renewed strength and clarity of purpose. Export volumes have recovered, particularly for SunGold varieties, with Zespri forecasting a record crop and export returns surging toward $4 billion — a major driver behind horticulture’s overall 19% growth in primary sector exports this year. Improved orchard management, better fruit quality, and more reliable post-harvest performance have been central to this turnaround. Growers are reinvesting confidently, expanding canopy, adopting precision horticulture tools, and upgrading packhouse automation to lift productivity. We have seen and supported increased lending for orchard development finance, seasonal working capital, and long-term investment solutions aligned to land-use ambitions and succession planning. With strong offshore demand from Asia and Europe, and a renewed focus on quality over volume, the kiwifruit sector is once again leading New Zealand horticulture into a prosperous future.
While global uncertainty continues to influence input costs, New Zealand’s exporters are benefiting from a favourable exchange rate environment. A weaker New Zealand dollar — trading persistently below US$0.61—has bolstered export competitiveness, lifting farmgate returns across dairy, beef, and horticulture. For many producers, this currency tailwind has helped offset rising costs for key inputs like fuel, fertiliser, and imported machinery. Fertiliser costs have edged higher, with urea prices up 18% and phosphate up 12% year-on-year, driven by international supply constraints and energy prices. However, improved commodity pricing and production scale have largely preserved on-farm margins. At the same time, interest rates are showing signs of continued easing. With the Reserve Bank’s gradual loosening of the Official Cash Rate expected into 2026, debt servicing pressure is beginning to ease, improving cashflow certainty for agribusinesses.
For many farming operations, the current balance of strong commodity pricing and improving financial conditions represents a window of opportunity to reinvest, restructure, or build resilience ahead of future volatility.
After several years of volatility, confidence is returning across New Zealand’s rural sector. Farmers and growers are feeling the uplift from stronger returns, a more stable policy environment, and improved seasonal conditions. According to the latest Tracta AgriPulse survey, overall sentiment has turned positive for the first time in two years, with producers citing better payout forecasts, manageable input costs, and stronger support from their banks and industry bodies. This renewed optimism is translating into action: farm development plans including genuine expansion are being reactivated, equipment upgrades are back on the table, and more businesses are engaging in succession conversations.
There is also a growing appetite for innovation, with increased investment in digital tools and on-farm data systems. We are seeing this momentum firsthand. Demand for tailored agribusiness lending is rising, and our regional teams are busier than ever helping clients build forward-looking financial strategies. With confidence returning and commodity markets holding firm, New Zealand’s rural communities are shifting from cautious survival to confident growth.
At BNZ we particularly understand the importance of supporting first farm and herd buyers make the leap from employees to owners. It’s an exciting time, as anyone who’s gone through it themselves will know, and we see a role here for BNZ to connect new owners with seasoned farmers to help set them up for success.
While the outlook for New Zealand agriculture is positive, a few key risks warrant close attention over the coming year. Climate variability remains front of mind, with recent weather patterns highlighting the growing unpredictability of rainfall and temperature across regions. Although La Nina has eased, a shift to more neutral or El Nino-like conditions could bring moisture stress to eastern areas and impact pasture and crop performance.
Input cost volatility is also a watchpoint. While commodity returns are strong, global fertiliser and fuel markets remain exposed to geopolitical disruptions, and any sharp movements could squeeze margins — particularly for intensive operations. There are also geopolitical and trade uncertainties to monitor. Changes in global demand, regulatory settings in key markets like China and the US or shifts in trade access could impact export flows.
Domestically, evolving expectations around climate and freshwater regulation, as well as emissions pricing, could create compliance and investment pressure, particularly for those not already aligned with industry assurance schemes. But while these risks are real, they are also manageable. Farmers are resilient and have a long and proven history of adapting to change. They are also well capitalised and increasingly supported by sophisticated tools, data, and finance.
We understand that a key part of managing risks is partnering with a bank that understands farmers’ goals and the strategies they have in place to achieve them. One of the things that sets BNZ’s agribusiness offering apart is that our agribankers are the decision-makers. The banker sitting at your kitchen table is often the person who’s able to approve your loan. This means that you get a decision on the spot - and the certainty that comes with it.
New Zealand’s agricultural sector enters the next 12 months with real momentum — and a growing sense of purpose. Global demand for safe, high-quality, sustainably produced food is intensifying, and New Zealand remains well placed to deliver it. Our pasture-based systems, strong biosecurity, and trusted provenance continue to command premium positioning across key export markets.
BNZ sees this shift every day. We are working with customers who are building future-focused businesses — diversifying revenue streams, embracing on-farm assurance programmes, and planning succession with confidence. With strong commodity prices, improving financial conditions, and a renewed focus on long-term sustainability, the sector has the opportunity to grow both value and resilience.
The road ahead won’t be without bumps — but with clear direction, deep capability, and a trusted banking partner, New Zealand agriculture is set to thrive in a world that increasingly values exactly what we do best.
BNZ is an advertising sponsor of the Herald’s Agribusiness and Trade report.