Prospects for the meat and wool sector in New Zealand are gloomy

It says revenue for the sector is expected to decrease by 3% to $11.9 billion for the year to 30 June 2023, drop again in 2024 and only get back to the 2023 level by 2027. The report puts this decline down to the global cost of living crisis, which is straining household budgets and the Covid challenges in China where consumer confidence is down. The report notes that after a strong 2021/22 season, the average farm profit before tax for 2022/23 for all classes of sheep and beef farms is expected to fall by a massive 31% to $146,300. It says this fall in profit is due to the increase in farm input costs and weaker meat export prices. Inflation is identified as another factor that is putting downward pressure on sheep and beef farm earnings. In response, the SOPI report points out that farmers are applying less fertiliser, planting fewer crops and delaying maintenance. Fertiliser costs have risen by 15% and debt servicing by 51%. Stock numbers show a slight decline in both beef ...