News

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

Meat
Frozen Bone-In Beef
Lamb
New Zealand
Published Mar 15, 2023

Tridge summary

Beef + Lamb NZ delivers bad news for farms due largely to inflation.

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 – ...
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