Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Better times for sheep and beef farmers

2 September 2011

Better times for sheep and beef farmers

Sheep and beef farm income increased dramatically last year with a 75 per cent rise in before tax profit, compared with the previous year. This was a welcome change to a run of poor profit years including a 50 year low in 2007-08, according to the latest Beef + Lamb New Zealand (B+LNZ) Economic Service New Season Outlook.

B+LNZ Economic Service Executive Director, Rob Davison said the increased returns came from a significant lift in international prices for meat and wool.

“At the farm gate, lamb was up 43 per cent, sheep meat 62 per cent while wool was up 43 per cent (from the previous year’s 100 year low) and beef was up 18 per cent.

“These price increases occurred despite the New Zealand dollar appreciating against the currencies in which the products were traded. The New Zealand dollar was up 11.0 per cent against the USD.”

For the current farming year just started, the outlook is for sheep and beef farm profit before tax to fall 7 per cent, largely from a stronger exchange rate. The outlook scenario is centred on the New Zealand dollar strengthening 2.5 per cent against the USD, 2.2 per cent against the GBP and 4.6 per cent against the Euro.

“This leaves gross farm revenue virtually unchanged (+1.2%) but on-farm expenditure is expected to increase 4.2 per cent with fertilizer usage up relative to recent years.”

Davison says farm profit is spent on tax first and then tax paid profit goes on debt reduction, capital machinery purchases and farm family living expenses.

During the five year period of low farm profitability (2005-2009), cash deficits were made up from increased borrowing - higher overdraft levels and refinancing term debt.

For the 2011-12 year, lamb export receipts are expected to remain similar to the previous year at $2.9 billion. Increased lamb shipments (+4.8%) are offset by the stronger exchange rate scenario. The increased volume of lamb shipped comes from an expected improved lamb crop, despite the 2.5 per cent decrease in the ewe flock this year.

Beef export receipts are expected to decrease 2.1 per cent to $2.6 billion with export volumes up 3.1 per cent but the FOB price per tonne down 5 per cent from an expected increase in the exchange rate.

Davison says wool production is estimated to decrease 1.3 per cent due to smaller sheep numbers but with some offset from an increased clip per head. Wool export receipts are estimated to remain similar to the previous year at $718 million.

The full report is on the Beef + Lamb New Zealand website at: www.beeflambnz.com/economicservice .

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO: