New Zealand Agribusiness Report Q4 2014 - New Market Study Published

We believe that increased access to international markets, particularly Taiwan and China, will prove to be the prime growth driver for the agribusiness sector in New Zealand over the medium- to long term. This will be supportive for both the dairy and the livestock segments. The dairy sector in particular will benefit from export demand growth, as many other countries in Asia are facing growing domestic demand and relatively limited production capacity. However, the outlook for the sector is weak for 2014/15. We forecast milk production to grow by a weak 1.8% year-on-year (y-o-y) to 21.4mn tonnes, compared with the 4.0% growth recorded in 2013/14 and the five-year growth average of 4.3%.

Key Trends

* Milk production growth to 2017/18: 12.7 % to 22.8mn tonnes. Given the small domestic consumption base and the high productivity of the sector, long-term expansion will mainly come from export opportunities, particularly to Asia and the Middle East, which are forecast to enjoy significant dairy consumption growth over our forecast period.
* Milk powder production growth to 2017/18: 18.3% to 1.5mn tonnes. Across all the dairy segments, export opportunities (particularly to China) will be the main growth drivers over the medium term.
* Beef production growth to 2017/18: 8.2% to 671,000 tonnes. The dairy sector will continue to limit the amount of cattle available for slaughter.
* 2014 real GDP growth: 2.6%, up from 2.4% in 2013.
* 2014 consumer price inflation: 1.8%, up from 1.1% in 2013.

Full Report Details at
- http://www.fastmr.com/prod/872657_new_zealand_agribusiness_report_q4_2014.aspx?afid=301

Key Developments

New Zealand's dairy sector recorded a strong year in 2013/14, with milk production, dairy prices and farms income registering robust growth. However, the outlook for the sector is weak for 2014/15. We forecast milk production to grow by a weak 1.8% year-on-year (y-o-y) to 21.4mn tonnes, compared with the 4.0% growth recorded in 2013/14 and the five-year growth average of 4.3%.

Over our forecast period to 2017/18, we project milk...

The New Zealand Agribusiness Report features Business Monitor International (BMI)'s market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.

BMI's New Zealand Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.

Key Benefits

* Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
* Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.

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