New Zealand sees disparity in livestock performance

By Ed Bedington

- Last updated on GMT

NZ farm profits a mixed picture

Related tags New zealand Cattle Beef Lamb Livestock

Climatic conditions have impacted on New Zealand livestock producers, with North Island producers benefiting to the detriment of their South Island cousins, the latest economic reports show.

According to Beef + Lamb New Zealand’s (B+LNZ) mid-season update, farm profits in the north are predicted to be up by 19%, while farmers in the south have declined by an estimated 20%. The disparity is being blamed on a combination of ratio of sheep to cattle farmed in each island, along with problems of drought.

B+LNZ Economic Service chief economist Andrew Burtt said: “While the average farm profit before tax has been adjusted slightly downwards, to $109,400, North Island profits are expected to increase 19%, to $117,100, while South Island profits are predicted to decrease 20%, to $100,200. The difference can be accounted for by the ratio of sheep to cattle farmed in each island, with cattle making up greater numbers in the north.

“Farm-gate prices for cattle are expected to reach record highs this season, on the back of strong demand and tight supplies, particularly in the US. We are also experiencing the upside of a weaker New Zealand dollar against the US dollar.”

Revenues from sheep production are expected to drop 3.6%, he said, caused by a fall in both price and the number of prime lambs being sold. Meanwhile, cattle revenue was likely to see increases of up to 19%.

Meanwhile, beef export volumes are expected to increase by 1.2%, with low dairy profits and drought conditions increasing the dairy cow cull. However, value is predicted to jump by 31%.

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