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3 August 2005
The Ministry of Agriculture and Forestry's (MAF) 2005 Farm Monitoring reports
into the status of the country's primary sectors, paint a mixed picture of the
current trends in farming and the outlook for the business.
The monitoring reports look into sheep and beef farming, dairying, deer
farming, arable farming, horticulture and viticulture.
In general terms, the reports find a positive outlook for sheep and beef,
with gross revenue up, farmers confident lamb prices will stay up, and beef
exports to Asia sharply increased, adding stability to beef schedule prices.
Land prices continue to rocket and some farmers surveyed are leveraging off
the value of their property to purchase off-farm assets.
The dairy sector report says farm revenue lifted nine percent in 2004/05, due
to the increased milk-solid payout. This was despite a difficult season
climatically throughout the country with production down 4-10 percent in all
regions. And while gross farm revenue is budgeted to drop one percent in
2005/06, overall farmer morale and confidence are high heading into the season.
The price of dairy farms also continues to increase.
The farm monitoring reports are part of an annual process where MAF Policy
monitors the production and financial status of farms in terms of their cash
income and expenditure. Trends, issues, and sector concerns are also monitored.
The reports are based on model farms designed to best typify average farming
operations within specific regions. Information for each model is drawn from
real farmers and a wide cross-section of agribusiness. The prices used are
farmers' own expectations in May/June 2005. The model data is not MAF price or
The deer farming report paints a less positive picture, with continuing low
returns and farmers divided between using low stock prices to expand their
operations and others leaving the industry.
While farm revenue increased in the North Island model, reflecting an
increase in venison returns, the revenue for the South Island model reached an
all-time low. Velvet returns also reached an all time low.
The arable report is a mixed bag with major weather swings causing early
season concerns but overall the season suiting most crops. While overall
production is much higher than in the 1990s, the sector's bottom line has
remained static. The report finds farmers are budgeting for a similar result
next year, from higher productivity, and slightly lower prices and small cost
The horticulture sector had a tough year in 2004/05, with incomes generally
falling and the sector's confidence shaken.
Recurring themes in the report are low export prices as a result of high
exchange rates, increasing costs of production and increasing volumes of
Unlike key agricultural products, horticultural crops have not been buffered
from the effects of the exchange rate by high commodity prices.
The sixth monitoring report investigates the state of the wine industries and
finds average prices for the major varieties have fallen in 2005 from 2004. For
many growers, confidence in vineyard profitability in the short term has fallen,
as downward pressure becomes a reality.
The 2005 grape harvest produced a vintage of 142,000 tonnes of grapes – the
second largest harvest recorded. Sauvignon blanc is the leading variety,
representing 45 percent of the vintage. The industry is presently strongly
focused on quality.
For further information, please contact: Chris Ward, Senior Policy Analyst,
MAF Policy. Phone 04-474-4168 Email:
To view the reports in full, visit: