As calving and lambing is in full swing there are positive signs on the horizon for farmers.

After a tough few years there are good signs for the dairy industry, with Fonterra lifting its forecast payout to $5.25 a kg of milk solids plus dividend, taking it to well over the average break-even mark for most farmers - a great morale boost for hardworking farmers.

Most other industries have had strong seasons, with beef returns higher than normal and horticulture exports up 20 per cent, led by kiwifruit, wine and apples.

Seafood is also up 15 per cent and arable 14 per cent which shows we have a strong and diversified primary sector.


A good example of diversification is a new programme announced recently to boost the sheep dairy industry.

'Sheep - Horizon Three' is a $31.4 million partnership between Spring Sheep Milk Co. and the Ministry for Primary Industries, as part of the Primary Growth Partnership (PGP).

It's an exciting and comprehensive programme for an industry which has huge potential.

It will involve new genetics, new farming systems and developing high premium niche products. New Zealand operators will be involved in all parts of the value chain.

As part of the programme a research farm will be established to increase the genetic merit of the sheep, and there will be a strong focus on developing the right skills for successful sheep milk farming.

The global sheep milk industry is estimated to be worth $6.5 billion and is growing strongly, especially in Asia where many people are intolerant to cow's milk.

We have a massive opportunity to tap into this market and position New Zealand as a producer of premium products.

Another benefit is that sheep dairying has much less of an environmental footprint than traditional dairying.


The programme is expected to generate revenues of at least $200 million per year by 2030 from sheep milk and new, high-value related products like ice-cream.

As part of the contracting process MPI and Spring Sheep will agree how other sheep dairy operators will be able to benefit from the programme, including the supply of milk to Spring Sheep and open access to improved dairy sheep genetics and knowledge.

This will be another success story for the Primary Growth Partnership, which is supporting world-leading research and innovation in the primary sector.

Government and industry are together investing $727 million into 19 current projects covering areas like fertiliser application, fishing net designs, remote control logging technology, and developing high-value meat and dairy products.

All of these projects are estimated to add at least $6.4 billion to the New Zealand economy, and will be a big help in reaching our goal of doubling primary sector exports by 2025.