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Dairy's role in sustaining New Zealand - Fonterra

Dairy's role in sustaining New Zealand - Fonterra

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Contents<br />

1. The current contribution of dairy 1<br />

1.1 Purpose of report 1<br />

1.2 Direct contribution to GDP 1<br />

1.3 Contribution to regional <strong>in</strong>comes 2<br />

1.4 Contribution to export performance 2<br />

1.5 Contribution to Balance of Payments 4<br />

1.6 Contribution to employment 4<br />

1.7 Contribution to other sectors’performance 5<br />

1.7.1 Supply cha<strong>in</strong> 5<br />

1.7.2 Dairy farm<strong>in</strong>g 6<br />

1.7.3 Dairy process<strong>in</strong>g 7<br />

2. Modell<strong>in</strong>g dairy’s economic contribution over the past decade 9<br />

2.1 Objective of modell<strong>in</strong>g 9<br />

2.2 Modell<strong>in</strong>g technique 9<br />

2.3 Advantages of CGE modell<strong>in</strong>g 9<br />

2.4 Modell<strong>in</strong>g scenarios 10<br />

2.4.1 Scenario 1: The price of milk solids 10<br />

2.4.2 Scenario 2: The growth of dairy<strong>in</strong>g over the past decade 11<br />

2.5 How we analyse the modell<strong>in</strong>g results 12<br />

3. Milk solids price spike 13<br />

3.1 Headl<strong>in</strong>e results 13<br />

3.2 Detailed results 13<br />

3.2.1 Direct effects: the dairy sector 13<br />

3.2.2 Indirect impact on other <strong>in</strong>dustries 16<br />

3.2.3 Macroeconomic effects 17<br />

3.2.4 Regional impacts 18<br />

4. Production growth over the last decade 19<br />

4.1 Headl<strong>in</strong>e results 19<br />

4.2 Detailed results 20<br />

4.2.1 Direct impacts 20<br />

4.2.2 Indirect impacts on other <strong>in</strong>dustries 20<br />

4.2.3 Macroeconomic effects 21<br />

4.2.4 Regional impacts 22<br />

5. Conclusion 24<br />

Dairy’s <strong>role</strong> <strong>in</strong> generat<strong>in</strong>g growth<br />

G

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