New Zealand Agriculture
June 2010
New Zealand Agriculture – the key facts
New Zealand is a small, developed economy in the South West Pacific Ocean. It has a population of only 4.32million but produces food for more than 60million people each year. The backbone of the country’s agricultural economy is pastoral agriculture; dairy farming and sheep and beef production.
This productive base is founded on a mild climate and very fertile soils.
Climate
As a small land mass surrounded by oceans, New Zealand enjoys a temperate maritime climate. Mean annual temperatures range from 10°C in the south to 16°C in the north. The coldest month is usually July, and the warmest is February. Most areas of New Zealand have at least 1,800 sunshine hours annually.
Rainfall is reliable, ranging from 600 to 1,600 millimetres, spread throughout the year.
Generally New Zealand is benefiting from the effects of climate change,particularly the very productive southern regions.
Pastoral agriculture
New Zealand has often been referred to as one big farm. New Zealand has nearly 10 million hectares of productive grassland and agriculture generates almost 50% of New Zealand’s annual export income with most of that generated by the two primary sectors that dominate the New Zealand landscape – Dairy and Sheep/Beef meat products.
Pasture-based livestock systems have been developed and refined to minimise farm labour requirements and generate maximum productivity from improved animal genetics.
The cornerstone of New Zealand agriculture is the family farm, run by the farmer with family and/or part-time assistance. Machinery ownership on farm is deliberately minimal, with many specialised tasks such as crop establishment and harvesting performed by contractors.
New Zealand agriculture does not receive any form of government subsidy. This contrasts strongly with agricultural production in developed countries that involve high levels of inputs, heavy machinery, livestock housing and government support (subsidies) for crop inputs and storage and product exporting.
It has been estimated that the energy requirements per unit of protein in New Zealand pastoral production are only half to one third of those in the United Kingdom and Europe.
Cost of Milk Production – large dairy farms (USD/100kg)
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<20
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20-25
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25-30
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30-40
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>40
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Ukraine
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China
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Israel
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UK
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Switzerland
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Argentina
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Brazil
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Ireland
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Germany
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France
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India
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Uruguay
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South Africa
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Spain
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Netherlands
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Chile
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Australia
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USA
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Sweden
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Italy
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NZ
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Canada
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The New Zealand Dairy Industry
The New Zealand Dairy Industry is an integral part of the New Zealand economy, producing more than NZ$10 billion of exports or 22% of New Zealand’s merchandise trade. Whilst the industry represents just over 3% of the world milk supply, it represents nearly 40% of internationally traded dairy products.
NZ’s Fonterra Co-operative Group is the world’s largest dairy processor. It is owned by New Zealand farmers which supply the company. Fonterra sells products to customers and consumers in 140 countries and it has around 20,000 staff in 40 countries.
One of the great strengths of the New Zealand dairy industry is the co-operative structure that provides strength in the marketplace, ensuring that full market returns are reflected directly to farmers in the form of regular monthly payments.
Alternatively, NZ does have a number of smaller and well run dairy companies, particularly in the South Island. These present milk supply options without the cost of shareholding in the co-operative and do suit those investors that want a more pure farm investment.
The New Zealand Sheep and Beef Industry
New Zealand has a proud history of highly productive, grass-based sheep and beef farming.
New Zealand produces 6% of the world’s sheepmeat, but forms 38% of global sheepmeat trade because it exports 90% of its sheepmeat.
Beef production in New Zealand is almost 100% grass-based. New Zealand produces 1% of the world’s beef, but forms 5% of global beef trade as 79% of production is exported.
The New Zealand sheep and beef industry has seen dramatic growth in on-farm animal performance with rising lambing percentages and greater carcass weight per lamb. Since 1990 sheep farmers have produced 12% more lambs from 31% fewer sheep. As a result of increased production, improved product prices and industry stability there has been a 140% increase in farm prices over the past 7 years.
