MPI, in its Situation and Outlook for Primary Industries (SOPI) report, also expectsthat growth to be sustained, with revenue forecast to hit $58.3b in the June 2026 year.
The 2024 year was affected by China’s slowdown and a correction in commodity prices.
Director-general Ray Smith said MPI was backing the sector to drive New Zealand’s economy and prosperity and help deliver the Government’s goal of doubling export value within 10 years.
Smith said the global economic environment was showing signs of improvement.
“Inflation is returning towards target levels, interest rates are declining, which is reducing debt servicing expenditure, global shipping costs have weakened over the last four months and, while still elevated, farm input costs have started to decrease,” he said.
The report said revenue for New Zealand’s dairy products was expected to lift 10% to reach $25.5 billion in the 2025 year, thanks to higher global dairy prices arising from tight global supply.
Meat and wool export revenue is expected to lift slightly to $11.4b in the year to June 30, 2025 as demand improves and beef supplies tighten globally.
Continued strong demand for produce is expected, with horticulture export revenue reaching $8b, up 12% in the June 2025 year.
Revenue from Kiwifruit is expected to break through $3b for the first time.
Forestry exports are expected to recover, increasing 4% in the June year to $6b, following supply disruptions and slow global demand affecting the previous two years.
Robust demand, tight global supply and high prices continued to benefit New Zealand’s seafood sector, with export revenue expected to lift 3% to $2.2b in the year.
Food and fibre accounted for 81.1% of New Zealand’s goods exports in the 2024 year, MPI said.
Over the last 10 years, food and fibre exports have grown on average by 3.2% per year whereas other goods exports have grown by 1.5%, it said.
MPI said the food and fibre had bounced back after bottoming out in 2023/24.
“The rebound in 2024/25 is expected to be driven by stronger global demand and tighter global supplies for key commodities, including dairy, beef, mutton, and seafood products.
“Additionally, export revenue for 2024/25 is expected to be supported by higher export volumes of dairy, forestry, seafood, and horticulture products.
“Despite elevated global uncertainty, food and fibre sector export revenue is expected to increase in 2024/25 as good production conditions, rising commodity prices, and a slightly lower NZ dollar against the US dollar outweigh global headwinds,” it said.
Dairy exports are forecast to be strong in the June 2025 year. Photo / NZME
Dairy
The 10% forecast lift in dairy export revenue follows a drop-off in 2023/24.
Global dairy prices are expected to be higher in 2024/25 because of tight global supply from key dairy exporting regions such as the US and the EU. Global import demand has also strengthened, MPI said.
Milk production and export volumes are expected to increase because of favourable weather conditions.
Higher global dairy prices are likely to result in an increase in the all-company average farmgate milk price to $9.60 per kg of milksolids.
This higher milk price, combined with moderating farm expenses are expected to lift profitability this season.
Meat and wool
In meat and wool, MPI said rising prices looked set to offset declines in volumes.
Higher prices are being driven by tighter global beef and mutton supplies as well as robust demand from Europe and the US, MPI said.
The sector may not fully capitalise on higher prices due to lower production volumes from a smaller flock, lower lambing rates, and post-drought herd rebuilding.
Sheep and beef farm profit is expected to decline in 2024/25 due to lower farmgate revenue and elevated expenses.
Forestry looks set to recover in 2025. Photo / NZME
Forestry
Forestry is recovering from domestic supply-side disruptions and slow global demand over the previous two years, MPI said.
Early signs of increased building activity in China could lead to higher demand for logs and some processed wood products, but overall global demand remains low for wood products.
On the supply side, closure of some wood processing plants will lead to lower production capacity in the near term.
“Uncertainty remains due to the instability of global economic recovery, potential trade barriers, and continued high input costs.”
MPI says kiwifruit export revenues will be strong in 2025.
Horticulture
MPI said Horticulture’s forecast export performance would primarily be driven by the kiwifruit industry, attributed to a record 2024 crop and increased production volumes of gold kiwifruit in the 2025 season.
Wine export revenue is also projected to recover from a challenging 2023/24, supported by strong consumer demand for New Zealand wine.
Apple and pear export revenue is forecast to exceed $1.0b spurred by recovering export volumes after the cyclone-affected 2023 season.
Fresh and processed vegetable export revenue is also expected to recover, increasing by 7%.
Seafood is attacting high prices on the world market. Photo / Anna Sarjeant
Seafood
Seafood export revenue would be driven by continued high prices from sustained demand and tight global supply along with rebounding aquaculture production and export volumes.
“However, increased competition in the rock lobster export market in China poses downside risks to this forecast,” MPI said.
Recent declines in fuel costs have eased margin pressures for fish farmers, fishers, and processors and contribute to the industry’s positive outlook, the ministry said.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
