New Zealand needs to add more value to food exports in quest to catch Australia by 2025, report says

By Alex Tarrant

New Zealand needs to add more value to food exports before shipping them overseas in order to help the economy catch up with Australia by 2025, according to a report commissioned by the government.

The report focussed on the growth of the country's processed food and beverage (F&B) exports, saying they were the biggest lever available in the quest to double New Zealand exports per capita by 2025. Based on the experience of its temperate climate, small country peers, New Zealand should be looking to at least double its exports per capita if it wanted a 60% increase in GDP per capita by 2025, the report says.

"To double exports in 15 years, we must work with what we’ve got – the biggest lever available is food and beverage exports (53% of export value)," the report says.

"While New Zealand achieves good F&B exports per capita, it achieves poor F&B exports per square kilometre; we would appear to have “spare capacity” to export more," it says.

"However, declining available farm land and falling overall animal numbers strongly suggest that the path to exporting more F&B in the future is not just “more of the same”.

""In many traditional sectors, New Zealand has failed to forward integrate along the value chain," it says.

"New Zealand still significantly makes ingredients, which are sold to food manufacturers, who add value by turning them into processed foods ready for consumers."

"Relative to peers, New Zealand has good F&B exports per capita; however, our mix is currently skewed towards traditional minimally-processed products; we underperform in added-value processed foods."

"Adding-value is an obvious idea; historically there have been major barriers limiting the ability of New Zealand food processors to move into value-added processed foods; this will not be true in the future."

Minister of Economic Development Gerry Brownlee said the report identified "a number of reasons why New Zealand can and should build its focus on processed foods, including growing global demand and New Zealand’s strong history of food exports".

“The maths is pretty simple – a kilo of infant formula is worth ten times the value of a kilo of milk powder – so we know which one New Zealand should be selling,” Brownlee said.