Sheep and beef farm profits due for boost

Sheep revenue is forecast to lift 2.6 per cent, which includes a 4 per cent increase in lamb farmgate prices, to an average of 547c a kg. Photo / Supplied

Pre-tax profits for an average sheep and beef farm in New Zealand will increase to $109,900 this season - 9.6 per cent more than last season, but 3.1 per cent below the five-year average, Beef and Lamb New Zealand says in its 2016/6 season outlook.

Much of the extra profit is from an 11 per cent lift in cattle revenue on top of a 12 per cent increase in 2014-15, according to Beef and Lamb.

Sheep revenue is forecast to lift 2.6 per cent, which includes a 4 per cent increase in lamb farmgate prices, to an average of 547c a kg.

Beef and Lamb economist Andrew Burtt said international demand was expected to remain strong for beef, while tight sheepmeat supplies in Australia and New Zealand should support prices - although uncertainties remained around Chinese demand. "In this context, the increase in export prices is primarily expected to come from a weaker New Zealand dollar."

Export lamb production is forecast to decrease by 6.3 per cent in 2015-16.

New Zealand beef production is also expected to be down 5.3 per cent in 2015-16, after a record high in 2014-15, which was boosted by cull dairy cow processing in response to low dairy prices and high international demand for beef.