Farm­ers’ profit to fall 50 per cent

South Waikato News - - FARMING -

Beef + Lamb New Zealand’s mid­sea­son up­date es­ti­mates that North­land, Waikato and Bay of Plenty farm­ers’ profit be­fore tax for the 2012-13 sea­son will fall 50 per cent com­pared with last sea­son, to an av­er­age of $44,300.

‘‘The lower lamb price has really kicked us for touch this sea­son,’’ said Beef + Lamb north­ern North Is­land di­rec­tor, James Par­sons.

‘‘How­ever, we must re­mem­ber the fig­ures are be­ing com­pared with last sea­son, when both live­stock weights and prices were up. This sea­son we have poorer re­turns and liveweights are closer to av­er­age. And, of course, we now have the on­go­ing dry to con­tend with.’’

Beef + Lamb eco­nomic ser­vice ex­ec­u­tive di­rec­tor, Rob Dav­i­son, said na­tion­wide the farm profit be­fore tax for the cur­rent sea­son was ex­pected to fall 54 per cent, to an av­er­age of $73,000. ‘‘This is largely due to sharply lower lamb prices and a con­se­quent 27 per cent de­crease in sheep rev­enue. ’’

Lamb num­bers across New Zealand were up due to 123 per cent lamb­ing last spring but it would not off­set the lower lamb price, Dav­i­son said. The forecast av­er­age lamb price of $85 per head is down 25 per cent from last sea­son’s $ 113.60 – the sec­ond high­est price on record.

‘‘That has flowed through to farm­ers’ bot­tom lines, with the re­sult that profit lev­els will ef­fec­tively halve for the sea­son end­ing Septem­ber 30, 2013,’’ Dav­i­son said.

Cat­tle re­turns are pre­dicted to drop 8.8 per cent but Dav­i­son says the out­look is rel­a­tively pos­i­tive. The av­er­age gross rev­enue is es­ti­mated to be $409,300 – down 19 per cent from last sea­son. To­tal farm ex­pen­di­ture is es­ti­mated to fall only 3.6 per cent, to $336,300.

PRICE OF DROUGHT: Waikato sheep and beef farm­ers could be look­ing at prof­its halv­ing this sea­son as the full im­pact of cur­rent lamb prices, cou­pled with drought, kicks in.

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