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Dairy continues to lead export growth, farm sales still weak – Fed Farmers

Dairy export news

October saw another solid increase in exports, driven by dairy products, but their growth continued to be dwarfed by yet another petroleum fuelled surge in imports.

According to Statistics NZ’s monthly Overseas Merchandise Trade Statistics, goods imports of $8.3 billion in October 2022, up 24.1% compared to October 2021, continuing their run of strong growth. Most import categories had big increases, with petroleum and products posting a 44% increase to $943 million. However, fertiliser imports had steep decline, down 57% to $104 million.

Goods exports were worth $6.1 billion in October 2022, up 14.1% compared to October 2021. Dairy led the way. Milk powder, butter, and cheese exports were up 34% to nearly $2 billion; preparations of milk, cereals, flour, and starch up 29% to $203 million; and caseins and caseinates up 46% to $190 million. Exports of meat and edible offal were up a modest 3.3% to $601 million, while logs and wood articles were up 4.0% and fruit down 30%..

The goods trade balance in October 2022 was a deficit of $2.1 billion, a worsening of the $1.3 billion deficit for October 2021.

On an annual basis, for the year to October 2022, goods exports were $71.1 billion, up 14.5% on the previous year. For the key primary sector export commodities:

  • Milk powder, butter, and cheese: up 23.2% to $20.2 billion.
  • Meat and edible offal: up 17.3% to $9.9 billion.
  • Logs, wood, and wood articles: down 7.4% to $5.2 billion.
  • Fruit: down 3.8% to $3.8 billion.
  • Preparations of milk, cereals, flour, and starch: up 11.6% to $2.3 billion.
  • Wine: up 10.6% to $2.1 billion.
  • Casein and caseinates: up 46.8% to $1.7 billion.
  • In addition, live animal exports were up 4.5% to $525 million. However, eggs, honey, and other animal products were down 11.5% to $455 million; vegetables down 4.8% to $460 million; and wool down 2.7% to $413 million

Annual growth in goods imports was huge, up 25.3% to $84.0 billion. Petroleum and products imports had a 67% increase to $8.9 billion. Fertiliser imports were up 41% to $1.4 billion and other chemical products a 124% increase to $1.7 billion.

The annual goods trade balance for the year to October 2022 was a huge deficit of $12.9 billion, $8 billion higher than the previous year’s deficit of $4.9 billion.

Weak farm sales

The Real Estate Institute’s latest monthly Rural Market Statistics has shown a continuation of a falling market amid considerable rural ‘tension’.

Overall, there were 173 farm sales in the three months ended October 2022, unchanged from the three months ended September 2022 but 35.9% lower than the same three month period last year.

There were 1,501 farms sold in the full year to October 2022, down 15.9% compared to the year to October 2021. Dairy farm sales were down 7.2%, Dairy Support down 20.4%, Grazing farms down 16.0%, Finishing farms down 13.2%, and Arable farms unchanged.

The median price per hectare for all farms sold in the three months to October 2022 was $25,270, up 9.8% on the three months ended September 2022, but down 19.4% compared to the same three month period last year. The REINZ All Farm Price Index, which adjusts for differences in farm size, location, and farming type, was down 1.7% in the three months to October 2022 compared to the three months to September 2022 but it was up 1.6% compared to the same three month period last year.

REINZ identified rising tensions in the rural sector, with frustration and discontent over government policy, escalating input cost pressures, and spiralling interest rates, with a mood of caution on farm incomes. It saw a positive though in recent rain boosting grass growth.

Image credit: Matthias Zomer

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1 COMMENT

  1. If assest prices are excessively overvalued, we cannot be competitive in exports. Inflkation will also run high. Jabbie, with her qunatitative easing, has fully eroded our strengths. Hige trade deficits mean, the country is taken over by Globalists slowly. Jabbie is a curse.

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