Story: Economy

Page 2 – Agricultural production

Economists often characterise the domestic structure of an economy by sectors, in which they group farms, firms and institutions which are doing similar things. The usual means of measuring a sector’s contribution to the economy is the value of its net output (value added).

Not so sheepish

It used to be said that New Zealand had 20 times more sheep than people. By 2001 this was no longer the case: there were only 12 times as many sheep as people. However for each person there were also:

1 beef cow

1 dairy cow

3 cartons of apples and pears exported

13 litres of wine produced each year

16 chickens killed each year

40 trays of kiwifruit produced each year.

There have been major changes to the structure of New Zealand’s gross domestic product (GDP). Over the 80 years for which data are available there has been a substantial reduction in the share of agriculture in GDP (partly reflecting lower prices than in the past), a diminution of the manufacturing sector for about 20 years, and an uneven expansion of the service sector.

In all modern rich economies the service sector grows faster than the primary and secondary sectors. In recent decades this sector in New Zealand has grown so fast that the share of manufacturing has also diminished. However, import licensing and reductions in most tariffs during the 1980s and 1990s may have reinforced that trend by forcing the closure of manufacturing industries that could no longer compete with imports.

Types of farming

Despite the relative decline in both employment and output in agriculture, this sector remains hugely important to New Zealand, both in terms of image and of export trade. Much agriculture remains internationally competitive, partly because animals are largely grass fed, but also because New Zealand farmers are technologically innovative and sensitive to market opportunities and changes. Some of the most important forms of farming are:

  • Dairy: About a sixth of New Zealand’s exports of goods and services come from the dairy cow – mainly through the export of milk powder, cheese, casein and butter. There are over four million dairy cows, mostly Holstein-Friesian or Jerseys. About 80% are in the North Island, especially in Waikato and Taranaki, with considerable numbers in Northland, Bay of Plenty and Manawatū. In recent years Canterbury and Southland herds have been growing.
  • Sheep: At one time wool was New Zealand’s golden fleece, making up over a third of all export revenues. The relative fall in international prices since the mid-1960s meant that by 2000 the value of wool produced was less than half that of sheep meat. (Meat now makes up about a tenth of all exports, of which half is sheep meat.) The major New Zealand breed, the Romney, is bred both for meat production and for wool, which is mainly used in carpets. Well over half of New Zealand’s sheep are to be found in the South Island, mainly east of the Southern Alps, while Manawatū, Wanganui and Hawke’s Bay are also significant regions.
  • Beef cattle: Cattle, especially the Angus and Hereford, are farmed for beef, with some beef also coming from the dairy herds. Export receipts for beef are only a little less than for sheep meats. Much is used for American hamburgers. Beef cattle are to be found in most rural areas, but three-quarters are in the North Island.
  • Deer, goats and pigs: During the 1970s there began a diversification into deer and goat farming, both of which were sold for meat. There were also markets for goat milk and fibres, while deer velvet was sold as an aphrodisiac in Asian markets. In the 1990s goat farming declined, but deer farming remains significant especially in Canterbury and Southland. Pork production has gone into a slow decline.
  • Poultry: As consumers moved from red to white meat, chicken production increased largely for the local market. In 2000, 67 million birds were sold, along with 65 million dozen eggs.
  • Bees: In 2000 there were almost 5,000 beekeepers and over 9,000 tonnes of honey produced, some varieties such as mānuka having special international appeal for its curative qualities.
  • Crops: Grains are primarily grown for the domestic market, with wheat and barley leading. Most is grown in Canterbury.
  • Fruit and vegetables: The major fruit grown commercially are apples (especially in Hawke’s Bay), kiwifruit (Bay of Plenty), grapes and avocados (Bay of Plenty and Northland). In the years 1975–2000 there was an increase of over four times in the number of trays of pip-fruit exported. Fruit, nut and vegetable exports made up 3% of total exports, the most important component being kiwifruit, followed by apples, legumes and onions.
  • Vineyards: Marlborough, Hawke’s Bay and Gisborne have led the growth of the wine industry. The number of wineries more than doubled in the 1990s so that by 2001 there were 382. The total production did not increase as vineyards focused on high-quality wines like sauvignon blanc and pinot noir in place of bulk production. The result was an increase in exports to almost $200 million in 2001.

Other agricultural products which are on the rise include cut flowers and olives.

How to cite this page:

Brian Easton. 'Economy - Agricultural production', Te Ara - the Encyclopedia of New Zealand, updated 10-Sep-13
URL: http://www.TeAra.govt.nz/en/economy/page-2