An agribusiness analyst has warned that European Union agricultural reforms could provide New Zealand with one of its biggest trade shocks.
Ian Proudfoot, agribusiness leader for the global accountancy firm, KPMG, spoke at the Future Farms conference in Wellington.
And he identified the down stream impact of EU agricultural policy reforms as one of the risks that New Zealand agriculture sector needs to prepare for.
Mr Proudfoot says reforms of the European Common Agricultural Policy will unwind subsidies that have dampened supply.
He pointed particularly to milk quotas ion the dairy industry.
He says Irish milk production in particular is set to increase steeply and with every extra litre of milk headed for export markets it will be competing for the same nice markets that New Zealand does.
Mr Proudfoot says New Zealand also needs to prepare itself for a big drop in world dairy prices over the next year, as US dairy production increases.
