Securing the future of New Zealand’s $60 billion export engine

New Zealand’s farmers, fishers, growers, and foresters – in short, the entire food and fibre sector – have sustained a remarkable period of growth despite challenging conditions.

While growth across all components hasn't been even, the most recent Situation and Outlook for Primary Industries shows a 13 per cent uplift in export earnings to around $60 billion in the year to June 2025.

Heading into 2026 – and coinciding with the onset of conflict in the Middle East - farm profit was forecast to reach its highest level in 50 years, according to Beef + Lamb’s Mid-Season Update.

With lamb and meat prices rising, US demand for grass-fed protein strengthening, and Fonterra’s brands sale payout reaching farmer shareholders last month, a casual observer might think it’s time to pop the champagne.

Even strong wool, languishing in the doldrums of low prices for years, has shown sustained growth, reaching a national clip value of half a billion dollars, amid signs the world is renewing interest in this reliable, traceable and natural fibre.

Yet business confidence has plunged.

ANZ’s Business Outlook survey for March was conducted the day after the Middle East conflict began, and the much-discussed green shoots of economic recovery have since been overshadowed by uncertainty, rising costs, and tremulous international markets.

Over many of these factors, the Government has very little control.

Its support for the country’s largest export-earning sector to reach the predicted 3 per cent annual revenue rise by next month will be better solved by policy certainty and investment to shore up the price premium that global trust in New Zealand’s products demands.

The Government cannot control the re-routing of container ships nor the global price of commodities and is unlikely to offer fuel cost relief to farmers beyond the exemptions they can currently claim for.

What the Government can do – alongside the levers available to it in Budget 2026 – is focus on three critical areas to ensure the country’s food and fibre exports remain competitive, premium and in demand.

Trade

The Prime Minister highlighted this during a pre-Budget speech last month, noting the rules-based order New Zealand relies on has been replaced by hard power – creating an environment in which smaller nations have to adapt. New Zealand can’t afford to be shy when it comes to pursuing markets and relationships for our goods, and our exporters need stout diplomatic heft standing beside them as they negotiate a new future with new rules.

They also need investment to cope with a heightened risk profile from pests, diseases and climate-related pressures. Trust is the most important element of primary sector exports – people buy New Zealand food because it is safe. Investment in the new Plant Health and Environment Laboratory in Auckland is welcome and contributes to international confidence in our products and biosecurity systems. It would be great to see investment in bioeconomic research restored to previous levels to complement the investment in physical infrastructure.

Energy

Food processors, manufacturers, and greenhouses all rely on gas, making certainty of supply and pricing critical to the operation of primary sector businesses. Coupled with this is the planned Resource Management Act (RMA) reform, including efforts to speed up consenting processes and improve grid infrastructure; changes that should provide greater policy certainty and strengthen energy infrastructure reliability. The announcement of the Gas Transitions Loan Scheme to help those businesses over the next few years should also preserve job and production certainty.

Infrastructure

The National Infrastructure Plan takes an economic sector-agnostic view to planning over the next 30 years, based on what the country can afford, looking after what it has, prioritising the right projects, and making it easier to build better. These point in the right direction but could get sharper on where value is developed. As it currently stands, there’s a risk that the economic value created by the primary sector – often in less populous regions – could be overlooked in favour of demand in major cities.

Across both energy and infrastructure, we would like to see a more critical assessment of the investment required to support the target of doubling exports and ensuring regions are not left behind. Already, key export lifelines like the Port of Tauranga are on the cusp of constraint.

Quite simply, without the primary sector, the economy would be very sluggish indeed. Infrastructure investment should take the view of enabling and growing pastoral farming – arguably what New Zealand is best in the world at – in order to drive economic outturn.

According to Trade Minister Todd McClay, one in four jobs in New Zealand depends on the country’s ability to sell to the world.

That is why it’s vital that system-wide structural changes occurring here place the export-earning primary sector at the heart of decision-making.

The storms the primary sector has weathered, both meteorological and figurative, have varied in extremity over the past few years. Yet it remains the jewel in New Zealand’s export crown and deserves all the support to navigate the coming decades of complexity.