Beef and sheep farmers throughout the country can expect a slight easing in before-tax profit on farms for the 2011-12 season.
But the key word in this statement is "profit" because it is the profits which continue to provide the first real relief for farmers since profits bottomed out into four figures in 2007-08. This data is gleaned from Beef+Lamb New Zealand's economic outlook for beef and sheep farming in the coming year, prepared by the organisation's economic arm.
In terms of on-farm spending, the analysts predict fertiliser to be a priority for many farmers.
The review said sheep numbers - 31.9 million as at June this year - were down a little on the previous year but were driven by a tough spring last year as well as high prices for sheep. That meant more farmers culled poorly performing stock.
Beer cattle numbers stayed about the same at 3.94 million. Again, on the back of better prices, farmers culled poor stock.
Wool receipts for 2011-12 are expected to return $718 million, which is about the same as 2010-11.
Lamb exports are expected to gather $2.9 billion in 2011-12. That is about the same as the previous year with the review predicting that lamb numbers this season will increase by about 5.6 per cent.
Yet even while the lamb slaughter is expected to increase (up 5.7 per cent) to 20.1 million animals, that is the second lowest number in 51 years.
Beef + Lamb NZ said prices were expected to average $105 for a 17.9kg lamb. Last season's price, provisionally, was a record $116 a head, the highest in inflation-adjusted terms since 1956-57.
The review suggests that beef export receipts will drop by a fraction over 2 per cent to $2.59 billion and while export volumes should increase, the price a tonne should drop, largely on the back of a stronger Kiwi dollar than last year.
The outlook is for 2.3 million beef cattle to be slaughtered (up 1.8 per cent).
The review estimates that total farm revenue for 2011-12 should rise by 1.2 per cent and follows a 15.6 per cent increase for the previous year.
Total on-farm expenditure should increase by 4.1 per cent while the prices for on-farm inputs are likely to increase by 3.2 per cent.
And many farmers will be looking to increase fertiliser applications which had a low priority in recent leaner years.
Beef+Lamb's forecast suggests that sheep and beef farm before-tax profits will be $106,200 a farm, easing back from last year's peak of $114,200.
Last year's figure was the best in the past nine years.
"Sheep and beef farm profit before tax for 201-11 was the first real relief from low farm profits since 2005-06 that bottomed in 2007-08 at $9080 a farm," the economic review said.
"The improved profitability in 2010-11 has allowed opportunity to reduce debt built up during the recent run of drought and low-profit years."
Regionally, Sheep+Lamb NZ's economic outlook had these expectations for per farm incomes in the 2011-12 year.
NORTHLAND-WAIKATO-BAY OF PLENTY
Sheep revenue increasing 5.5 per cent to $109,100 on the back of improved prime lamb prices and lower buy-in prices for replacement stock.
Cattle revenue at $114,000 will be about the same as the previous year, while there should be better lambing percentages.
Expect on-farm costs to rise 3.9 per cent overall and farm profits before tax dropping to $52,300 on 2011-11.
EAST COAST
Sheep revenue drops 6 per cent to $230,600 from slightly fewer prime lamb sales and lower prices. Cattle revenue decreases 5.7 per cent to $106,000 on lower prices.
Like the other regions to the north, on-farm costs will lift with fertiliser expenditure increasing 27 per cent as deferred application becomes a priority.
Before-tax profits down 28.6 per cent from previous year to $93,900.
TARANAKI-MANAWATU
Sheep revenue up 13.2 per cent to $223,000 with more prime and store lambs sold and lower buy-in replacement costs.
Cattle revenue drops 6.7 per cent to $86,000 through lower prices and fewer cattle traded.
On-farm costs up 2.8 per cent with fertiliser spending increases 13.2 per cent, again because deferred application is a priority.
Before-tax profits up 12.8 per cent to $116,100.
MARLBOROUGH-CANTERBURY
Sheep revenue to $233,800 (up 8.3 per cent) mainly because of lower replacement buy-in relative to sale prices and more emphasis on supplying late-season lambs. Cattle revenue up 3.2 per cent to $93,900 on back of more cattle traded.
Expect on-farm costs to lift 4.1 per cent with fertiliser the big ticket item.
Before tax profit increases to $118,300 (up 4.1 per cent).
OTAGO-SOUTHLAND
Sheep revenue drops 2.3 per cent to $296,300. Extra lamb numbers available for sale do not compensate for lower prices. Cattle revenue down 13.6 per cent to $35,600 on lower prices and fewer cattle traded.
On-farm spending expected to rise by 2.2 per cent with fertiliser again to the fore with a 10.9 per cent drop in repairs and maintenance as a consequence.
Before-tax profits down 8.7 per cent to $150,800.
*Based on a presumption of the following exchange rates: US dollar, 0.81c; pound, 50c; euro, 59c.