New Zealand sheep and beef farmers confident despite ‘headwinds’

Sheep Central, September 26, 2018

MORE than two thirds of New Zealand’s sheep and beef farmers are positive about the future of the industry, according to research by Beef + Lamb New Zealand.

A survey of NZ livestock farmers in August this year found that 68 percent of respondents were confident – the highest level since B+LNZ’s first launched the research in November 2010.

Beef + Lamb NZ said the sheep and beef farmers’ positive mood contrasts with gloomy headlines on business confidence elsewhere in the economy, as well as recent inaccurate claims made by the Productivity Commission about the ‘marginal’ nature of the sector.

While B+LNZ’s recently released New Season Outlook 2018-19 forecasts a slight decrease in inflation-adjusted average sheep and beef farm profit before tax to $97,800 per farm, this is still potentially the fourth highest average farm profit figure since 1990.

B+LNZ chairman Andrew Morrison said farmers are confident on the back of strong prices and a favourable exchange rate, but there are still plenty of challenging headwinds for the sector.

“While it’s good that our sheep and beef farmers are feeling confident about their future, as an industry we know that we can’t take things like strong prices and a weak New Zealand dollar for granted.

“Beef + Lamb New Zealand’s recent New Season Outlook may forecast strong prices and the New Zealand dollar to weaken further for the season ahead, but it’s also predicting a slight fall for farm profit as the cost of inputs increase,” Mr Morrison said.

“This highlights that while we’re fortunate to be enjoying high prices for our beef, lamb, and mutton at the moment, we need to be mindful that these aren’t guaranteed longer term, even though there are solid indicators that global demand for New Zealand’s sheep meat and beef will remain strong.”

Beef + Lamb NZ said some of the headwinds for the sheep and beef sector include the rise of alternative proteins, potential significant regulatory change, growing protectionist practices in key export markets and the uncertainty of Brexit, major droughts in other red meat producing countries, and the impact of Mycoplasma bovis.

“The sheep and beef sector is well positioned to respond to these challenges.

“We have initiatives such as the Taste Pure Nature country of origin brand which will promote New Zealand’s premium grass-fed red meat overseas, we’re partnering with central and local government to develop better regulations that work for both farmers and New Zealand’s environment, and we’re continuing to work with our farmers to help them improve their environmental performance,” Mr Morrison said.

Confidence levels were broadly similar for both beef and sheep farmers, with 70pc of beef farmers and 64pc of sheep farmers feeling confident about the sector’s future.

Source: Beef + Lamb NZ.


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