Meat Farmers Tipped To Get Better Prices
January 19th, 2009
Agricultural economists say sheep and cattle farmers can expect strong increases for both lamb and beef prices over the next few months. Lamb prices at the farm gate for 2008-2009 are expected to be up 38% on last year, and beef prices are forecast to increase 11%. Economist Rob Davidson says total sheep and beef farmgate earnings are estimated to increase $500m to $4.4bn.
Falling production. He expects lamb prices at the farm gate to average $80 a head in 2008-09, compared with an average of $58 a head last year. But he notes the 38% increase is partly offset by a 23% fall in lamb production, mainly as a result of drought. There has also been a continuing incursion of the dairy industry onto sheep and beef land, both directly and through increased use of sheep and beef farms to grow fodder for dairy cattle. This has reduced the amount of land available for sheep production.
Positive trend. Meat and Wool NZ chairman, Mike Petersen, says lamb and beef returns are on a positive trend and looks set to continue – in contrast to other agriculture exports such as dairying where returns have dropped by more than a third on last season’s record levels. The industry board’s economists predict the average profit for sheep and beef farmers in 2008-2009 will remain low, but will be better than the 50-year low experienced last year. Before-tax farm profit was $16,700 in the 2007-2008 year and is forecast to be $45,600 for 2008-2009.
Copyright © The Main Report Group - NZ AGri-Business
