Sheep and beef farmers are still conservative about spending because they feel there has been no substantial change to industry structure or strategies, a Maf report has found.
Maf has released the 2011 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.
While the pastoral sector had experienced a significant lift in profitability, enabling farmers to restore bank balances, it showed sheep and beef farmers were very conscious their returns could "go down as fast as they have gone up".
Better product prices increased sheep and beef farm profits to record levels in 2010-11 and while lambing was down, the better prices for lamb, wool and beef more than offset that, Maf analyst John Greer said.
Farmers increased spending later in the season on productive inputs, particularly fertiliser, and also reduced debt. Some took advantage of the good year to buy capital equipment such as tractors and vehicles.
They were budgeting for an equally good 2011-12 income. Prices were predicted to be almost as good as last year's, although the increasing strength of the New Zealand dollar might undermine that, Mr Greer said.
Dairy incomes lifted significantly in 2010-11, despite a variable year climatically in many parts of the country.
Nationally, dairy production increased and, coupled with a record payout of $7.50 per kilogram of milksolids, this meant gross incomes lifted by 23%, continuing a trend of improving returns since the low of 2008-09.
Despite the increase in dairy income, spending on many farms remained quite tight and that was likely to remain until some time into the 2011-12 season, when farmers saw how the season, and payout, was progressing, Maf analyst Phil Journeaux said.
Venison returns at above five-year-average levels enabled deer farmers to achieve a good financial result.
A recent BNZ report said booming commodity prices had been an important component of New Zealand's economic recovery so far, with growing signs of higher export revenues filtering through the economy and on-farm expenditure and investment increasing as cash flows improved.
Farm building consents had been on the rise this year, after a subdued 2010.
Almost $112 million worth of consents were issued for farm buildings throughout the country in the first six months of 2011, up $24 million from the same period last year.