Steady meat outlook for export season

Steady export meat prices are expected over the next season.

Steady meat prices and production is predicted for the 2017-18 export season with strong improvements in deer, velvet and wool revenue.

Beef + Lamb New Zealand's new season outlook, released this week, showed farm profit before tax was estimated to increase 6.6% to $84,600 on average for sheep and beef farms.

Beef and lamb prices were expected to remain similar to the previous season despite an expected weakening of the New Zealand dollar.

B+LNZ chief economist Andrew Burtt said much of the outlook depended on the value of the dollar which was expected to ease as major trading economies strengthened in 2017-18. Total farm expenditure was forecast to rise marginally this season.

A slight drop in the national sheep flock was driven by a drop in breeding ewes but that was tempered by a lift in hogget numbers, particularly on the North Island's East Coast.

A 2.8% increase in the number of beef cattle was largely driven by weaner cattle being carried over in response to good feed conditions and firm prices.

Beef demand was expected to remain reasonable this year, driven by China. Continuing tight sheepmeat supplies in Australia and New Zealand, particularly mutton, were expected to support prices.

Export lamb production was forecast to increase by 0.5% in 2017-18 and New Zealand beef production was expected to be down slightly on last season as the average carcass weight was forecast to be lower.

In Otago-Southland, gross farm revenue was predicted to drop 2.1% to $417,600 per farm.

Sheep revenue would decrease 4.2% to $266,300 reflecting lower lamb prices, which offset a lift in the number sold prime.

Breeding ewe numbers on intensive finishing farms decreased for the fifth consecutive year which reflected an ageing farmer demographic and a shift towards less labour intensive options.

Cattle revenue decreased 3.2% to $57,800.

Wool revenue was expected to increase 6% to $54,900 as inventories from the previous season, in response to poor market prices, were sold.

ASB's latest Farmshed Economics report said the seasonal peak in lamb prices was nearing and that was expected to be around $7.25 or as high as $7.50.