Variable returns for sheep and beef farmers set to continue

22 October 2009

Sheep and beef farm profit improved 10 fold last year but the outlook for the next is less positive, according to the Ministry of Agriculture and Forestry’s (MAF) latest farm monitoring reports.

MAF's Christchurch Natural Resources Team Leader John Greer says the sheep and beef reports released today showed better prices for lamb, sheep and cattle boosted income in the 2008/09 season. However, production was below usual in many parts of the country due to this year's drought or carryover effects from last year's.

"Sheep and beef numbers continued to fall last season and the average stocking rate is now nearly one stock unit per hectare lower than it was two years ago," he says.

"This could be due to changing land use or the series of droughts some farmers have experienced."

Mr Greer says while income was up in 2008/09, farmers kept spending under control with many cutting back on fertiliser applications, which are now well below maintenance levels on most farms.

"In the coming year, production is expected to recover from the effects of the previous year's drought; however, farm gate prices are predicted to fall for all products due to the rising exchange rate and reduced demand in some markets.

"As a result, sheep and beef farmers are budgeting to make a cash loss of $18,000 for the 2009/10 season. This will be challenging for many farmers as farm costs and interest rates recover over the year.

"More positively, improved cash surpluses in the 2008/09 season combined with lower interest rates in 2009/10 could see farmers reduce debt levels and expenditure on interest," he says.

The Ministry of Agriculture and Forestry’s farm monitoring reports are compiled each year based on feedback from sheep and beef farmers, and industry representatives. The latest models were prepared in August 2009.

A copy of the reports can be found on the MAF website: http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/farm-monitoring/ 

Media contact:

Deborah Gray, MAF Communications
Phone: 04 894 0715, Mobile: 029 894 0715, Email: deborah.gray@maf.govt.nz

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