8 Dec 2010

Robust dairy sector benefits entire country - Fonterra

7:01 pm on 8 December 2010

The dairy sector generates a quarter of the country's export income, a study has found.

The Institute of Economic Research report commissioned by Fonterra and Dairy NZ also found the sector employs about 45,000 people and helps fill the country's tax coffers.

The report estimates a rise in the dairy payout of $1 dollar per kilo of milk solids is worth $270 to every New Zealander.

The expanding industry has been criticised for polluting waterways, but Fonterra's chief executive Andrew Ferrier says the benefits of robust global demand for dairy products are widespread.

Mr Ferrier says regions such as Southland and Canterbury have benefited from the shift to dairying.

But other exporters have not, as higher demand has pushed up the New Zealand dollar, reducing their competitiveness against foreign rivals.

Mr Ferrier says Fonterra expects New Zealand's own dairy production to keep growing at a rate of 1% to 3% a year.