Beef + Lamb NZ expects this season’s farm profits to be the best in a decade.
In his chair’s update to farmers , Mike Petersen says:
In summary, even with the settling in prices now being paid at the farm gate we are still predicting a farm profit before tax that is up 17% on last year. This will be the highest profit since 2001/02 in inflation adjusted terms, which is remarkable given the 2001/02 year was underwritten by a low US dollar where the Kiwi was worth 43 cents relative to the US!! This year’s farm profit reflects the strong international prices that have so far outpaced the strong exchange rate, however that trend looks likely to reverse as the currency races above 83c relative to the $US.
The past two seasons have been the best many sheep and beef farmers have encountered, in spite of the high value of our dollar.
It’s a welcome turn around from too many seasons when farmers were mining their capital gain and it is having an impact in slowing down conversions to dairying.
Beef + Lamb’s mid-season report is here.