Profits of beef and sheep farms in New Zealand are expected to drop

Published 2024년 9월 4일

Tridge summary

Beef + Lamb New Zealand (B+LNZ) anticipates a tough season for beef and sheep farmers, with a 7.4% drop in farm profit before tax to an average of $45,200 per farm. Despite a slight revenue increase, rising expenditures and high costs, especially interest payments, are squeezing profit margins. The sluggish Chinese economy is depressing sheep prices, with lamb and mutton prices expected to fall below the five-year average. Conversely, beef prices are projected to rise due to strong US demand. Export volumes for red meat are likely to decline due to reduced livestock numbers from drought. B+LNZ remains cautiously optimistic, suggesting a quicker recovery is possible if conditions improve.

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Original content

Beef + Lamb New Zealand (B+LNZ) is forecasting another challenging season for beef and sheep farmers with farm profit before tax expected to drop by 7.4% to an average of $45,200/farm. The organisation’s new season outlook shows that despite a slight increase (1.1%) in average revenue this will be offset by a projected 1.8% rise in farm expenditure. B+LNZ said that high costs, particularly interest payments, continue to impact profit margins, with profitability remaining at levels similar to those seen in the 1980s and 1990s. It added that farm profitability could be better than forecast if interest rate cuts are faster and deeper, and if lamb prices improve due to lower global supply New Zealand The report states that “a sluggish Chinese economy” will continue to impact on sheep prices for New Zealand farmers. China is by far New Zealand’s largest mutton market and remains the country’s largest single lamb market. The lamb price is projected to be $130/head, up just 1.1% from ...

Source: AgriLand