Forecast no surprise to farmers

5 August 2008

Forecast no surprise to farmers

Farmers will not be surprised by a forecast released by the Ministry of Agriculture and Forestry today, says president of Federated Farmers Don Nicolson.

MAF is forecasting solid growth for the primary sector over the next five years despite the tougher immediate economic outlook both internationally and locally.

"Long suffering meat and fibre producers will be relieved that world demand looks likely to improve farm-gate prices. The outlook is brighter for the lamb, beef and cropping sector than it has been for sometime, Mr Nicolson said.

"While producers are looking at a lift in returns, increasing production costs such as fuel and fertiliser will squeeze profit. Challenges such as the 2008 drought will also continue to have an impact as recovery can be a slow process.

"The report says world dairy prices have eased from recent record highs but the growth in demand should remain strong. This is great news for New Zealand's economy as New Zealand remains the largest exporter of dairy products in the world.

"Farmer returns are expected to be further boosted by a continuing softening of the New Zealand currency and a gradual easing of interest rates which will be good for all exporters.

"Because of our pasture based systems, New Zealand farmers are world leaders in sustainability. New Zealand food and fibre producers are therefore in a good position to continue to meet consumer's demand for high quality products.

"All-in-all the outlook is positive for our members. As always when New Zealand farmers are doing well, the New Zealand economy will do well," said Mr Nicolson.

ENDS

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