Key insights from June 2024 SOPI report

The Situation and Outlook for Primary Industries report is released by Ministry for Primary Industries twice a year and provides an update on the export performance of Aotearoa New Zealand’s food and fibre sector. The June 2024 update provides a forecast of the year to 30 June 2024 and highlights the importance of the food and fibre sector to our economy and shows the continued strength and adaptability of the sector over time. 

Some key takeaways include: 

• The food and fibre sector made up about 81% of New Zealand’s merchandise exports in the year to 31 March 2024 and is forecast to deliver $54.6 billion in export earnings in the year to 30 June 2024. 
• Over the last 10 years, food and fibre exports have grown on average by 3.6% per year. In comparison, other merchandise exports have grown by 1.6%. 
• Across the entire supply chain, employment in the sector totalled 359,000 people in the year to 31 March 2022. This represents almost 13% of all jobs in Aotearoa. 
• Over 90% of people employed in the food and fibre sector are New Zealand citizens or residents, with temporary migrants also playing an important part of the workforce, particularly for seasonal jobs. 

Some key issues affecting the food and fibre sector include:

Farmers continue to face increasing cost pressures, which have been ongoing since December 2020. However, the rate of this increase has slowed down over the past 18 months. Interest rates are thought to have peaked, inflation is declining, and fertiliser prices are returning to pre-pandemic levels. However, global commodity food prices have declined, and domestic food inflation has also slowed. Nonetheless, expenses are still high, and this pressure, in combination with low commodity prices may dampen farm profitability.  

Through market and product diversification, the food and fibre sector has shown resilience, and is expected to sustain growth after successfully navigating some significant events in recent years, such as the pandemic and Cyclone Gabrielle. However, some industries are still feeling the effects of the cyclone more than others. For most crops recovering from previous wet summers and cyclone damage, climatic conditions have been favourable, with a forecast 1% increase in horticulture export revenue in the year to 30 June 2024. However, some livestock farmers that were affected by cyclone damage are still recovering, with lower livestock numbers and needed repairs impacting on profitability.  

In 2023, we had a warm and dry winter with below average rainfall, and above average temperatures due to El Niño. This also resulted in more westerly winds in some areas. The impacts of El Niño continued through autumn, with variable rainfall levels across the country, resulting in drought in some areas. This has compounded some of the existing pressures that farmers are facing, all of which is contributing to downward pressure on farm profitability. While pastoral farmers in dry regions have had to reduce their stock of lambs, dry dairy stock and beef cattle, these conditions are suitable for some fruit and vegetable growers, such as Kiwifruit, where ideal growing conditions have resulted in good volumes and yield.

Agricultural technology will become more commonplace across the sector as a tool to enhance efficiency, productivity, and sustainability in farming and food and fibre production. High-quality innovation has become more common for farmers and growers as they seek a more competitive advantage in a global market. Agritech innovations are also seen as an important part of managing the country’s environmental sustainability challenges. This will reshape the agricultural workforce, both creating new job opportunities and addressing workforce challenges.  

What does this mean for VET?