Red meat rebound
The red meat sector is poised for a strong rebound this season, with export receipts forecast to top $10 billion and farm profitability to almost double.
The report states the expected lamb crop will increase by 2.6% on last year to 20.9 million head, backing the trend of the last few years.
Earlier this year, farmers faced significant weather challenges, but autumn was particularly kind ensuring breeding ewes were in prime condition and yielded good pregnancy scanning results across the country.
In spring, favourable conditions led to a strong lambing percentage of 129.9%, up 4.8% from last year, which has offset a reduction in the number of ewes of 1% to produce a strong lamb crop.
However, the optimism stemming from these figures is dampened by the stark financial reality faced by Kiwi sheep and beef farmers at present.
On-farm costs remain high and sheep meat prices in particular remain stubbornly low due to oversupply from Australia and weak conditions in key markets like China, which means many farmers will not make a profit this year. Beef, however, remains steady.
B+LNZ chief executive Sam McIvor says he recognizes the difficulties farmers face.
“We know many of our farmers are struggling, and although the lambing season results should be a reason to celebrate, profitability is a real challenge right now.
“The sector is resilient, however, and has made it through hard times before and has come out the other side even stronger,” McIvor says.
He says farmers are aware that there are economic cycles and farmers are agile in responding by looking at every part of their expenditure to ensure it is delivering value.
“The strong lamb crop is a testament to the skill of our farmers and will come as a welcome morale boost as we move into a possible drier period in some regions,” McIvor says.
Many farmers have indicated that they plan to market lambs earlier than usual this year, aiming to have more lambs processed pre-Christmas.
This was driven to a large degree by weather forecasting of potential drought due to El Nino, but so far it has been wetter than usual.
“Weather is something farmers are used to navigating,” says McIvor. “The real challenges for farmers the last few years have come from spiralling costs and the challenging global market situation, as well as fears of further increased costs from regulation.
“B+LNZ continues to work with industry partners such as Federated Farmers, DairyNZ and DINZ to ensure the new Government delivers on its promises for a more enabling and supportive environment for farmers.”
The response so far from government has been encouraging, McIvor says, but it will be about getting the detail right.
