Sheep and beef farms in New Zealand set to take hit on profits

Published 2023년 3월 15일

Tridge summary

Beef + Lamb New Zealand (BLNZ) has forecast a significant decrease in profits for sheep and beef farms for the 2022-23 season, with the average farm profit before tax expected to drop by 31% compared to the previous year to $146,300, and by 35% adjusted for inflation. This is due to factors such as rising on-farm costs, falling international prices and demand for red meat, and inflation. The forecast also includes challenges such as consumer resistance to rising lamb prices in the UK and Europe, competition from Australia, and supply chain bottlenecks. Despite these challenges, BLNZ sees growth opportunities in high-value markets and expanding Asian middle class.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Inflation and softening international prices are expected to erode this year’s forecast sheep and beef farm (ngā kau me ngā hipi) profits by a third compared to last year. In its mid-season outlook released this week, Beef + Lamb NZ (BLNZ) estimates average farm profit before tax of $146,300 for 2022-23, 31% below 2021-22 and lower than the average for the past five years. After adjusting for inflation, the 2022-23 farm profit before tax is estimated at $96,600, a 35% decrease from 2021-22 and slightly below the 10-year average. Farm profit before tax is equal to gross farm revenue minus total farm expenditure and is used to meet taxation payments, personal drawings, debt repayments and the purchase of capital items. “Inflationary pressure is causing on-farm costs to increase sharply, eroding the benefit of what are still historically pretty good farmgate returns,” said BLNZ chief economist Andrew Burtt. International markets have been mixed, with prices and demand for red meat – ...

Source: Farmersweekly