The primary sector has been a stellar export performer over 2025. Photo / Alan Gibson
The primary sector has been a stellar export performer over 2025. Photo / Alan Gibson
New Zealand’s primary exports are on track to reach $60 billion for the first time, the Government’s twice-yearly situation outlook says.
The Situation and Outlook for Primary Industries (Sopi) report forecasts export earnings will hit $59.9b in the June 2025 year – $3b higher than was projected in December.
Agricultureand Forestry Minister Todd McClay said the momentum was expected to continue, with exports projected to reach $65.7b by 2029.
“Strong global demand and healthy prices across key markets are positioning our high-quality, safe and sustainable food and fibre exports for record growth,” McClay said in the report, released at Fieldays.
meat and wool export revenue increasing 8% to $12.3b
horticulture export revenue growing by 19% to $8.5b
forestry export revenue up 9% to $6.3b
seafood export revenue lifting 2% to $2b
Ministry for Primary Industries director-general Ray Smith said the sector was managing a complex trading environment.
“In general, macroeconomic conditions have improved for the sector, with solid growth in key markets such as the United States, China and India,” Smith said.
“The inflation outlook improved, interest rates dropped, providing much-needed relief for farmers, and farm input costs moderated substantially during the year.”
The report said the strong lift in dairy revenue would be driven by higher global dairy prices.
“This is driven by a strengthening of global demand and a weakening in global supply, specifically decreased milk production in China.
Agriculture, Forestry and Trade Minister Todd McClay at the opening of Fieldays 2025. Photo / Maryana Garcia
“New Zealand milk production is forecast to increase 2.2%, driven by better-than-expected weather conditions.”
The lift in export prices was expected to lead to a record high farmgate milk price of $10.00 per kilogram of milksolids (kgMS) for the current 2025/26 season.
The higher farmgate price, combined with moderating farm expenses, especially lower debt servicing expenses, was likely to enhance farm profitability.
Meat and wool
A lift in key meat export prices was expected due to tighter global beef and lamb production.
“Higher export prices for most products are forecast to be partially offset by lower volumes of beef and lamb.
“Sheep and beef farm profit before tax is forecast to increase 89% in 2024/25 due to higher farm revenue more than offsetting higher farm expenditure.”
This lift in profitability followed a fall in 2022/23 and 2023/24.
Horticulture
The growth in horticulture was being primarily driven by the kiwifruit industry, with exports expected to reach $3.9b, following a record 2024 crop and forecasts for an even larger crop in 2025.
Wine exports are projected to fall 1% to $2.1b due to a higher share of bulk wine reducing average prices.
Apple and pear exports are forecast to increase 18% to $1.1b, supported by increases in export volume and average price.
Vegetable exports are forecast to grow 8% to $770 million, driven by increases in export volume and firm pricing for frozen and processed products.
Forestry
Forestry export revenue was expected to increase, led by stronger log prices and increased sawn timber export volumes as supply-side disruptions in processed wood products ease.
The outlook was tempered by uncertainty surrounding log exports.
“China’s weak property market continues to dampen log demand, while available harvest volumes are relatively high.”
Further uncertainty existed with shifting global supply chain patterns in response to trade tensions, which may result in exporters needing to look to different markets.
Domestically, low construction sector demand, high energy costs and a soft economy are weighing on the sector.
However, lowering interest rates and increasing labour availability may stimulate activity at home over the forecast period, the report said.
A fishing boat trawling in the Black Sea surrounded by a mass of seagulls. Photo / 123rf
Seafood
On seafood, the report said aquaculture is forecast to grow 13%, while wild capture is forecast to fall 3% due to lower volumes.
“Most key species are holding strong prices, except rock lobster, which faces pressure from increased Australian supply into China,” it said.
Over the long term, wild capture revenue was forecast to remain flat as lower volumes are offset by higher prices.
Aquaculture was expected to drive growth, led by mussels and salmon.
“Despite trade uncertainties, sustained demand, sustainability, investment, and market diversity support sector resilience and long-term growth,” the report said.
The food and fibre sector represents about 10% of New Zealand’s Gross Domestic Product (GDP).
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
