NZ: Positive outlook for sheep and beef farmers

by Editor fleischwirtschaft.com
Thursday, September 18, 2014
Photo: Rosel Eckstein / pixelio.de
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Rob Davison Groupe Bull


New Zealand sheep and beef farmers can look forward to a positive 2014-15 season, according to analysis released by Beef + Lamb New Zealand's Economic Service today.

B+LNZ Economic Service executive director Rob Davison says the season's favourable climatic conditions so far, expected higher product prices and a more export-friendly exchange rate collectively translate to improved returns for the country's sheep and beef farmers.

New Season Outlook 2014-15 predicts the average sheep and beef farm profit before tax will increase 8.0% on last season, to $110,800.

Davison says a 6.3% lift in sheep revenue is largely responsible for the increase, while total farm expenditure should only rise by an average of 2.3 per cent.

The international economy plays a significant role, with global growth expected to reach 3.4% this year and 4.0% during 2015.

Davison says that, while total sheep numbers are back on last season, the number of lambs tailed this spring is estimated to be similar to last spring – at 25.6 mill. head – reflecting kind climatic conditions. "However, export lamb production is forecast to decrease by 2.6%, as farmers opt to hold onto more ewe hoggets as replacement breeding stock which is a positive indicator for the sector."

Meanwhile, export mutton processing is forecast to drop by 21% over the coming year – a correction on last year, when dry conditions in the north and dairy expansion in the south saw larger numbers of ewes processed than usual.

Bull, steer and heifer farm-gate prices per kilogram are forecast to increase 8.5%. Overall, the value of beef and veal meat exports is expected to increase by 5.5% on last season. This reflects total volumes dropping 3.6%, while average values rise 9.4%, on the back of expected higher international prices and a more favourable exchange rate.
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