Beef+Lamb expects sheep revenue, which contributes 48 per cent of farm revenue, will lift 1.2 per cent to $263,600 driven by strong farmgate prices.
New Zealand sheep and beef farm profits are expected to decline in the coming year as higher spending outweighs a lift in revenue from the products they sell.
The average farm is expected to earn a pre-tax profit of $129,700 in the June 2019 year, down 2.8 per cent from
a pre-tax profit of $133,500 in the 2017/18 year, according to industry group Beef+Lamb New Zealand.
Beef+Lamb forecasts farm revenue will lift 0.7 per cent to $545,900 in the coming year, driven by increased revenue from sheep. It expects sheep revenue, which contributes 48 per cent of farm revenue, will lift 1.2 per cent to $263,600 driven by strong farmgate prices.
Wool revenue is expected to increase 5.3 per cent to $37,600 as a lift in prices offsets a decline in volumes. Cattle revenue is seen dropping 3.7 per cent to $142,500 due to softer average beef cattle sale prices, the organisation says in its New Season Outlook published today.
On the other side of the ledger, average farm expenditure is expected to rise 1.8 per cent to $416,200. Beef+Lamb said spending was expected to rise in all parts of farm businesses except for repairs and maintenance, interest costs and feed and grazing. Prices for inputs used on sheep and beef farms are expected to increase 3.2 per cent, following a 2 per cent increase last year. Spending on fertiliser, lime and seeds is expected to rise 1.9 per cent as an increase in volume offsets a slight decrease in on-ground prices.
