Will Foley: Primary produce performing

It is all smiles on the farm unless you have a large wool clip, says Federated Farmers Hawke's Bay president Will Foley. Photo/File

Meat companies are receiving near-record export prices for beef, lamb and venison, says Federated farmers Hawke's Bay president Will Foley.

Both meat and dairy companies are reporting strong results.

Hawke's Bay based Rural Equities, which owns 22 farms valued at more than $200million in New Zealand including several in Hawke's Bay, reports income for the year to the end of June was $9 million compared with a loss of $4.059 million for the previous year.

Operating earnings before interest and tax were 40 per cent up, attributed to higher milk prices, steady sheep and beef returns and property and investment revaluation.

"This is a satisfactory result with solid contributions across the board," executive chairman David Cushing said.

"Debt has more than halved during the year to $12.4 million."

Government-owned Landcorp reported a jump in livestock value and strong market prices for its $51.9 million profit for the year ended June 30, more than four times the $11.5 million for the same period last year. Revenue rose 11 per cent to $233.5 million while expenses rose 3.3 per cent, which included costs related to the end of its sharemilking contract with Shanghai Pengxin.

A $20 million increase in the value of livestock reflected strong market prices, the company said. Revenue from milk rose 35 per cent thanks to increased dairy payouts from processors, rebounding from their lowest level in 10 years, Landcorp said.

New Zealand's terms of trade - exports prices compared with import prices - were close to a 44-year high in the quarter to June.

Statistics New Zealand prices senior manager Jason Attewell said the rise in export prices was largely due to higher meat and dairy. Meat prices were up 9.2 per cent, while the 3.9 per cent increase in dairy prices was influenced by higher butter and cheese prices, milk powder prices having fallen slightly.

The 1.5 per cent rise in June meant New Zealand could buy 1.5 per cent more imports for the same amount of exports.

It is not all smiles on the farm. Mr Foley said wool prices were "a disaster" despite the supply falling during lower stock numbers and stockpiling.

"There doesn't seem to be any light at the end of the tunnel," he said.

A solution lay in the dairy industry for farmers wishing to produce more beef.

"The quickest and easiest way into beef cattle is to rear more calves out of the dairy industry."