6 Apr 2016

Dairy sector will pick up, says minister

11:22 am on 6 April 2016

Primary Industries Minister Nathan Guy has reassured the dairy sector the medium to long term outlook remains strong.

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Primary Industries Minister Nathan Guy said global dairy demand would increase over the next 10 years. Photo: 123rf.com

New Zealand dairy interests are hoping European farmers will reduce production to stimulate depressed world dairy prices.

However, a spokesperson for the European Dairy Farmers organisation told RNZ Rurals that would not happen in the immediate future.

That was because dairy farmers were lifting production despite low milk prices to get a return on their investments.

New Zealand's special agricultural trade envoy Mike Petersen said increased production from Europe would restrain dairy payouts for another couple of years.

But Mr Guy is remaining positive, and said after this tough season it should pick up.

Nathan Guy during caucus run 1.03.16

Nathan Guy Photo: RNZ / Alexander Robertson

"I'm very optimistic on the medium to long term outlook. So are the Bankers Association and so are Fonterra.

"In China, there is a softening on their one child policy, they're consuming more protein, they're predicted to increase their consumption of dairy by about 30 percent in the next 10 years.

"Some forecasters are also predicting that the global demand may increase by 40 to 45 percent in the next 10 years. We're looking at a period of volatility through a good period of 2016.

Launching a new support brochure for farmers, Mr Guy said MPI wanted to remind them they were not alone and would come out of the downturn more productive and successful than ever.