Sheep and beef farmers across the country have been breathing a sigh of relief over the past week as Beef and Lamb NZ has released a positive-look forecast for meat and wool prices.
The mid-season update predicts a strong demand for sheep and beef products, with the average farm profit expected to rise by 35% and Southland and Otago farm profits by 12%.
However, Beef and Lamb was also forecasting an increase in on-farm expenditure, mainly in the form of fertiliser and repairs and maintenance.
Beef and Lamb Southern South Island economic service manager Jenny McGimpsey said that after a poor season last year, an increase in profit was expected.
''The main three areas that are driving the increase are the sheep meat, lamb and mutton as well, which is supported by an increase in wool prices and the beef prices are also steady.''
Overall, it is good news for Southland sheep and beef farmers, she said.
The profit increase would also mean farmers would be paying more tax, but would allow them to re-invest money into their farming businesses, she said. The season's forecast on the average lamb price was also looking to increase to $100 per head, which was up 18% on last year.
Beef and Lamb NZ economic service chief economist Andrew Burtt said the reduced availability of lamb in New Zealand and Europe, combined with the strong demand for the product in Asia and the Middle East, was expected to support the increase in prices.
The overall auction wool price is also expected to increase by 13% on the previous year, driven by a significant price increase for strong wool.
• The Beef and Lamb mid-season update is available at www. beeflambnz.co.nz
- by Nicole Sharp