The $70b export race: NZ agri-sector rides high returns but clouds are gathering

Tuesday, 23 June 2026

New Zealand agriculture is riding a wave of strong growth and high returns, three years after a period of record low confidence, but a forecaster has warned of the importance of diversification in a world where geopolitical volatility is the new normal.

Dr David Skilling, director of Netherlands-based Landfall Strategy Group, told an audience at the Primary Industries Summit in Auckland that exporters and business owners needed to take action as they navigated conflicts, tariffs, supply chain disruption, and changing market and consumer preferences.

“We are seeing a rotation away from Western economies as the global engine of growth to emerging markets across the global South,” and that had both implications and opportunities for New Zealand operators, said Skilling.

“If you look over the last 15 years or so since the financial crisis, the global economic and geopolitical system has been characterised by a much greater incidence of shocks, of disruptions, economic, domestic, political and geopolitical in nature.”

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He said the dynamics weren’t simply a series of episodic, unrelated events, but spoke to a global economic and geopolitical system that was “turning on its axis.

“In general, the last 35 years have been fairly smooth sailing, including for including New Zealand, but we are transitioning into a new regime. In the geopolitical space, strategic rivalry between China and Russia and in Western countries is increasing, and that rivalry is not simply a matter of having navies or missiles aimed at each other. This is full spectrum strategic rivalry, as opposed to the Cold War.

“We are seeing trade sanctions, export restrictions, investment controls, a lot of things that are shaping the operating environment for business.”

It was “the new normal”, he said.

“We're shifting from regime of the last 35 years of what I call the market state, which very broadly speaking was an environment of open markets of expanding trade, an environment where governments retreated from economic activity.

“Governments [now] are going to be much more involved, partly motivated by a geopolitical rivalry, partly motivated by concerns around supply chain resilience around critical volume … [they’ll] organise policy in a way that's informed by competition. Governments want to secure leading positions.

“We're going to see this playing out in a variety of dimensions, and this model is called state capitalism model.

“This is a much more activist, much more volatile environment into which we are moving, and so in terms of what that means for business, proceeding on an assumption that the next impact is going to be in some way similar to the last 20 or 30 years is a significant mistake.”

New Zealand’s export share is about 26% of gross domestic product (GDP), and it has been sitting around that level over the last 30 years.

Skilling called that “disturbing”, and said he believed the primary sector was vital to changing this.

“Our export GDP is the same now as it was in the mid 1970s … we need to do a better job with our export success. The primary sector to me has a really important role in addressing this challenge.

“If we don't fix this, then all of the aspirations around growing quantity per capita won't be achieved in the way that we want it to,” Skilling said.

Skilling said the industry needed to invest more into innovation, diversifying its markets, and “mobilising more domestic capital into the domestic primary sector as part of better equipping itself for growth and increasing global instability”.

Despite times changing, Skilling said global demand remained strong and the global economic outlook was “reasonably positive”.

With commodity prices at highs, milk prices sitting at $9.75 per kg of milksolids, and beef prices sitting at record highs, and farmer confidence at the highest confidence levels on record, having surged from the lows of 2023, Federated Farmers president Wayne Langford said the industry was in a good place.

Agriculture and Trade Minister Todd McClay was also optimistic, and said growth and prospects for the sector were strong.

Primary exports were expected to hit more than $70 billion by 2030, he said.

“This is now a sector on the rise. New Zealand's food and fibre sector is on an extraordinary trajectory.

“The Government's vision is clear: to position New Zealand as a world leading high-value producer of premium sustainable food and fibre, and we're on track to double the value of our exports within the decade. The latest forecast shows we are ahead of schedule, and by 2030 we're looking at the primary exports exceeding $70 billion, and every farmer, grower and the processors who innovate and their hard work, are making this possible.”

McClay said there was significant opportunity to grow exports, particularly in markets like India, who New Zealand signed a Free Trade Agreement with in April.

“The New Zealand-India free trade agreement … stands as one of the most significant market access breakthroughs in a generation for all of New Zealand, but for the primary sector, this landmark deal opens a door to the market of 1.4 billion people and provides tariff reduction or elimination to 95% current export failure.”

The FTA however excludes dairy products like butter, milk, cheese and yoghurt, and India remains an entirely restricted market for New Zealand beef exports, largely for cultural reasons.