Sheep and beef income down, while deer is stable

Sheep and beef farmers can expect their income to be down six percent this season (2012/2013), compared to last year, while deer farmers are experiencing their third season of relatively stable prices, according to new figures issues by the Ministry of Primary Industries (MPI).

The 2012/2013 season is expected to be more subdued for pastoral farm businesses as product prices come off recent highs, MPI says.

The government departed has released the 2012 pastoral farm analyses as part of its annual Farm Monitoring Report series. The reports provide models and overviews of the financial performance of typical dairy, sheep and beef and deer farms, based on information gathered from a sample of farmers and industry stakeholders.

On sheep farms, lambing was up nearly 10 percent on last season. Improved prices for sheepmeat, beef and wool, combined with the higher productivity in 2011/2012, lifted net cash income for the sheep and beef farm model by 18 percent to $543,000.

For 2012/2013, sheep and beef income is expected to be down six percent due to lower returns for lambs and wool and farmers are cautious. However, while the profit before tax is forecast to fall around 15 percent, at $181,300 it is still the second-highest profit for the national sheep and beef farm model since 2000. Note that the 2011/2012 actual result was $213,841 profit before tax, which was an improvement of 44 percent on the previous season.

Deer farmers, meanwhile, experienced their third season of relative stability in product prices and good on-farm productivity in 2011/2012, which has enabled some capital expenditure and debt repayment and boosted confidence in their sector. Similar results are forecast for 2012/2013.

National dairy production was up nearly 10 percent on 2011/2012. However, this was offset by a declining payout so the farm income was similar to the previous year. In 2012/2013, however, total income from milksolids is expected to fall 20 percent for the national dairy farm model, resulting in a 57 percent drop in profit before tax.

MPI analysts have also noted some key developments for the pastoral sector, including the beginning of mandatory tagging of cattle under the National Animal Identification and Tracing (NAIT) programme, land-use change and succession for sheep and beef farmers, together with the need to reduce environmental impacts such as nutrient runoff into waterways and the Trading among farmers proposal for dairy farmers.


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