Dairying boosts regions 40 per cent
Manawatu, Wairarapa and Hawke's Bay have seen their economies boosted by $1.24 billion in the last year on the back of the dairy boom.
DairyNZ figures show dairy revenue was worth $643.3m to Manawatu, $473.7m to Wairarapa and $123.9m to Hawke's Bay.
Regional areas throughout New Zealand have enjoyed a 40 per cent jump in revenue thanks to dairying. In total they earned $14.3 billion in 2013-14 compared to $10.2bn the year before.
Dairy export revenue was worth $17.6bn to the end of June 2014.
Top provincial performer was Waikato, which earned $3.8bn, followed by Canterbury at $2.77bn, Southland with $1.72bn and Taranaki $1.44bn. These were followed by Bay Of Plenty ($991 million), West Coast-Nelson ($841.7m), Northland ($790.7m), Otago ($727.7m).
DairyNZ's chief executive Tim Mackle said its recent Economic Survey showed the industry injected much of its revenue increase back into growth, farm spending and jobs.
"Our latest survey shows the financial value that dairy farmers bring into each province, helping grow residents' wealth even if they are not dairy farming themselves," Mackle said.
However, dairying is projected to lose a little of its lustre in the coming season with Fonterra forecasting a payout drop down to $7 a kilogram of milksolids.
DairyNZ economist Angie Fisher said that, based on a milksolids production increase of 3 per cent for the 2014-15 season at a payout of $7, total regional earnings would fall to$13.2bn.
This was less than 2013-14 due to the significant decline in milk price but potential earnings were still higher than 2012-13 where both drought and a lower milk price reduced revenue nationally.
Furthermore, New Zealand's dairy export revenue is expected to rise in the future, according to a Situation and Outlook 2014 report from the Ministry for Primary Industries (MPI). It predicts exports to reach $18.4bn by June 2018, based on a modest rise in domestic production, increasing international dairy prices, and a depreciating New Zealand dollar.