New Zealand dairy exports, which make up a fifth of the nation’s total overseas trade, are likely to surge 58% over the next four years on rising prices and demand, according to Bloomberg news.
Citing figures from the Ministry of Agriculture, the news agency says dairy exports will rise to $15.67 billion by the year ending June 30, 2014, from an estimated $9.94 billion in the current year. The figures were from a government report “Situation and Outlook for New Zealand Agriculture and Forestry”.
Sales by Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, and rivals are being buoyed by demand from China. Better returns are encouraging farmers to increase the size of their herds, which will boost production, according to the forecasts.
The ministry projects the national milking herd will increase to more than 5 million by 2014, and production will rise 22% between 2014 and 2010.
Payments to farmers are expected to fall in 2011 because of increased global supply and lower world prices, the ministry says. By 2014, payments will have recovered reflecting increased demand and a lower exchange rate.
The government economists also forecast national milk price will jump to $7.21 per kg by the end of 2014, according to the National Business Review (NBR).
Fonterra, the country’s biggest dairy company, had earlier projected that farmers can expect milk price of $6.60 per kg in the season to May 2011. Government forecast for the same period is $5.60 per kg, the NBR says.
