Fonterra now responsible for a quarter of NZ export earnings

Posted by Editorial on 21st July 2008

The valuable contribution the dairy industry makes to the New Zealand economy has been highlighted in a report prepared by Statistics NZ for Fonterra, which shows that over a quarter of the country’s export earnings is now accounted for by the dairy industry.Fonterra Chairman Henry van der Heyden said the figures for the year to May 2008 confirmed “dairying and our dairy farmers as a true cornerstone of our economy”.

“While there’s an obvious contribution to our export receipts and the trade balance, the real benefits here are the contribution from dairying which starts on the farms of our shareholders and flows through local communities and the regions, and our cities,” he suggested.

In the latest figures dairying’s contribution has risen by more than three percent to a total of 27% of New Zealand’s export revenues, and Fonterra’s contribution alone is 25% – highlighting their strength in NZ.

Much of the increase has been driven by record high commodity prices and Fonterra believe the figure could have been higher if it weren’t for the drought decreasing milk production by around four percent.

“This is a business that touches every corner of New Zealand with direct employment and many thousands more jobs and economic activity. Everything from professional services, consultancy and construction work, through to transport, technology and research,” Mr van der Heyden added.

At a time of slowing economic growth nationally, Mr van der Heyden said confidence has never been stronger in dairying, with a record payout to farmers in 2007/08 and a strong start to the new season.

“We’re seeing continued investment from farmers and in our processing capacity – that’s a huge boost, particularly for regions like Southland with a lot of new jobs and benefits flowing through,” he said. “It’s great that dairying is able to make such a positive and timely contribution to the New Zealand economy at a time when the broader economy is facing increasing pressure.”