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Ashburton Courier: September 26, 2019

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Dairy exports up, good ‘nutrition’ for economy<br />

The value of New Zealand dairy<br />

exports jumped by $1.47 billion to<br />

total $18.1 billion in the year ended<br />

June 30, that’s got to be some good<br />

nutrition for the New Zealand<br />

economy, and help towards<br />

providing Kiwis with more of what<br />

they say matters to them, says<br />

professor Graeme Doole, DairyNZ<br />

principal economist.<br />

It doesn’t take an economist to tell<br />

you that if we’re to afford more of<br />

what is important to our quality of<br />

life here in New Zealand, the<br />

economy has to grow ­and it has to<br />

grow sustainably and responsibly to<br />

ensure our future generations can<br />

continue to benefit and enjoy ahigh<br />

level of wellbeing, he says.<br />

‘‘Given our relatively small<br />

population base, the way to grow a<br />

strong and healthy economy is by<br />

increasing exports of high­value<br />

products.<br />

‘‘As New Zealand’s largest<br />

exporter of goods, the dairy sector<br />

currently sits at 31 percent of total<br />

merchandise exports, having grown<br />

in value over the past two decades at<br />

acompound annual rate of eight<br />

percent per year.<br />

This remarkable growth has been<br />

achieved both through increased<br />

milk production and by increasing<br />

the value of exports through the<br />

ongoing product innovation and<br />

skilled, targeted marketing by New<br />

Zealand’s dairy processing<br />

companies.<br />

‘‘And it’s also important to note<br />

that this growth is being achieved at<br />

the same time the dairy sector is<br />

stepping forward to embrace greatly<br />

improved environmental practices,<br />

both on farm and in processing.<br />

‘‘Dairy exports are amajor driver<br />

of New Zealand’s terms of trade ­<br />

this is the ratio of the value of our<br />

exports to the value of our imports.<br />

An improvement in anation’s terms<br />

of trade increases the purchasing<br />

power of its people as they can afford<br />

more imports for agiven level of<br />

exports. Due to this effect the export<br />

performance of the dairy sector is<br />

helping to lower the price of<br />

everything New Zealand imports.<br />

‘‘Take the cars we drive, for<br />

example. Thanks to the value of dairy<br />

exports, we can afford to import a<br />

better quality of vehicle than we<br />

would otherwise, and, collectively,<br />

we do own more than four million of<br />

them ­New Zealand coming in at<br />

third in the world for vehicle<br />

ownership per capita, behind the tiny<br />

European microstate of San Marino<br />

and the not much larger Monaco.<br />

Then there’s the fuel we import to<br />

propel them.<br />

‘‘Our much­loved, and also<br />

imported coffee is abit cheaper too,<br />

so is the imported sugar to stir into it,<br />

and even the imported cinnamon to<br />

sprinkle on it if your preferred jolt<br />

has alittle spice on top.<br />

‘‘The list of imported products and<br />

services that are more affordable for<br />

Kiwis because of the value of dairy<br />

exports is endless.<br />

‘‘In the year ended June <strong>2019</strong>,<br />

dairy earned more than twice as<br />

much as the meat and forestry<br />

sectors, and 10 times more than wine.<br />

‘‘As in previous years, our dairy<br />

products went to more than 140<br />

different countries, the top markets<br />

being China, Australia, the United<br />

States of America, the United Arab<br />

Emirates and Japan.’’<br />

‘‘It’s reached the point where,<br />

today we can say that every one of the<br />

46,000 people employed by the dairy<br />

sector brings in the equivalent of<br />

$393,000 in export earnings; and<br />

every one of the country’s milking<br />

cows earns $3,625.<br />

Dairy is certainly good nutrition<br />

for our economy ­aswell as our<br />

people ­and it’s tasty too.’’<br />

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2208736

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