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Beef and Lamb New Zealand's mid-season update, released yesterday, estimated farm profits before tax for the 2013-14 season would increase to an average of $113,700 per farm.
Total gross farm revenue was expected to increase 9.2% to $460,200, reflecting a 12% increase in sheep revenue, Beef and Lamb New Zealand economic service chief economist Andrew Burtt said.
Total farm expenditure was estimated to be up 2.8% to $346,500, on the back of increased repair and maintenance spending.
Interest expenditure dropped by 2.6%, thanks to a slight decrease in farm debt and lower interest rates.
This season's forecast average lamb price was $100 per head, up 18% on last year and 2.5% higher than the average for the previous five seasons.
Reduced lamb availability in New Zealand and Europe, combined with strong demand for lamb from Asia and the Middle East, was expected to support lamb prices, Mr Burtt said.
In Otago-Southland, gross farm revenue was expected to increase to $449,100 for 2013-14, up 12% on the previous season.
Sheep revenue increases 14% to $288,100 due to a lift in prime and store lamb prices; wool revenue increases to $66,000, up 11% on 2012-13 due to a lift in sale price, coupled with some sales of existing stocks to lift volumes; while the cattle account is up 2% to $46,900.
Dairy support was down on the 2008-09 peak, when revenue from dairy grazing contributed 5.5% of gross farm revenue.
Farm profit before tax was expected to increase to $131,400 for 2013-14, up 33% on 2012-13.