The New Zealand Dairy Industry Essay

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New Zealand is the ninth largest milk producing country in the world, accounting for 2.4% of the global milk production, (MBIE, 2015) of which most is exported; unlike most other countries, the New Zealand dairy sector produces significantly more dairy products than is required to meet internal consumption demands, making New Zealand the world’s largest exporter of dairy products. As stated in the New Zealand’s Treasury report, ‘New Zealand is highly dependent on the primary sector with commodities accounting for around half of total goods exports’. (Govt, 2014) Agriculture directly accounts for 4.6% of GDP and the sales figures for beef and dairy from the manufacturing sector to the end of 2013 were $41.7 billion (Govt, 2014) which gives an indication of just how important the dairy sector is to the New Zealand economy. New Zealand dairy products are exported to over 100 different countries throughout the world, where in particular, developing countries such as China and India, with the population growth, rising incomes, urbanisation and westernisation of diets, are leading the increase in demand.(Fonterra, 2014) The growing demand in China for protein-based commodities has seen New Zealand’s dairy export trade grow significantly; China now purchases a third of New Zealand’s dairy exports and are New Zealand’s leading dairy export market. To meet the demand and maximise the returns from this colossal market, the dairy sector within New Zealand have responded by
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