Farmers’ profit to fall 50 per cent
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.