13 Jun 2013

Dairy sector dominance concerns farming leader

1:20 pm on 13 June 2013

A farming leader has warned of the pitfalls of the country's dependence on the dairy sector.

The Ministry for Primary Industries forecasts that much of the growth in export sales in the next four years will come from dairying.

Primary industries farming, horticulture, forestry and seafood earn about two-thirds of the country's merchandise export earnings, generating $30 billion a year.

Within that, dairy accounts for a third of primary exports, and a quarter of total exports.

Minister for Primary Industries Nathan Guy says China's insatiable appetite for dairy products means the sector's future is very bright.

Landcorp chief executive Chris Kelly says better returns are prompting farmers to convert from sheep and beef to dairying, and that may undermine the long-term viability of the red meat sector.

Mr Kelly says he's mildly hopeful the red meat industry will act soon to sort out its troubles, lift the fortunes of sheep and beef farmers, and provide better balance to primary sector growth.