“Modest improvement” Tipped For Farm Profits
June 8th, 2009
National Bank’s Rural Report predicts farm profitability for 2009-2010 will to show a modest improvement over last year’s results on the back of firmer prices and lower interest rates, though dairy may lag behind. “Most farm product prices in 2009-2010 are expected to be similar or better than 2008-2009,” assuming the kiwi dollar weakens as expected over the next two years. The outlook for sheep meats is steady though spring 2009 premiums may hit new records on supply shortages. The mid-season price for a 17kg lamb will be similar to this year’s at $85/head.
Mid-season beef schedules should show a modest increase next season. US beef production fell 4% in the first three months of 2009 from a year earlier. National Bank forecasts the mid-season steer price will rise 25c/kg to $3.55/kg carcass weight. Prices for fine, medium and strong wool are forecast to slide to $12, $5.60 and $3/kg clean respectively, about 10% below 2008-2009 season averages. Prices for dairy products have steadied since slumping 60% between late 2007 and January 2009 though the kiwi dollar remains relatively high. EU and US milk production growth has slowed, with weaker farm gate prices and high feed costs squeezing profits for many farmers.
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