It happened in 2013. In a single year, New Zealand’s exports to China leapt a mind-boggling 45 per cent, increasing by a whole $3.1 billion to $10b, making China now our biggest international customer.

Australia got knocked off the top spot it had held since 1989. And while the change might have been predicted, its speed and scale has still left New Zealand producers stunned.

Dairy led the charge. Milk powder was 40 per cent of what we sent across the waters and with sales accelerating all through last year, no wonder farmers are now looking at an all-time record high payout of $8.30 per kg of milk solids.

This is despite an alarming series of industry blunders, including the dicyandiamide contamination farrago, Fonterra being fined as part of an infant formula price-fixing probe, and easily the worst mistake, the botulism scare which has now seen one of Fonterra’s key customers, French food giant Danone, tear up its supply contract and launch a damages suit for around $500 million…

… Tim Morris at Coriolis Research, who has authored reports for New Zealand Trade and Enterprise and other Government agencies, agrees, saying 2013 was a big year when it came to China and 2014 will be another, yet level-headedness is needed.

Morris says economic cycles last seven to 10 years. And while the 2008 global financial crisis might seem only yesterday, we are now six years into the current rebound, so the next world downturn could be just around the corner. He is one of those pundits who can imagine a wrenching correction caused by China’s over-expansion.

So the strategic thinkers are looking far past China, he says. “Everyone in the industry who has their heads screwed on straight realises we are already over-exposed there and will have been taking steps to deal with that.”

However long term, the world has a growing middle class population and New Zealand has its unique advantages as a food producer.

Morris says New Zealand once sent 95 per cent of its exports to Britain. The game now is diversification. This is why the Trans-Pacific Partnership (TPP) trade agreement matters. If the negotiations get across the line, it will open up new Japanese and US markets to New Zealand. Then over the coming century, it will be tropical Asia that is our real opportunity, Morris says.

The full article can be read here.