25 September 2018
Media release
Sheep and beef farmers bullish about the future but watchful of challenging headwinds
More than two thirds of sheep and beef farmers are positive about the future of the industry, according to research by
Beef + Lamb New Zealand (B+LNZ).
Sixty-eight per cent of sheep and beef farmers surveyed in the August 2018 quarter are confident – the highest level
since B+LNZ’s first launched the research in November 2010.
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.
For example, 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, it is still potentially the fourth
highest average farm profit figure since 1990.
B+LNZ Chairman Andrew Morrison says 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,” says Mr Morrison.
“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.
“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 sheepmeat and beef will remain strong.”
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,” says
Mr Morrison.
Confidence levels were broadly similar for both beef and sheep farmers, with 70 per cent of beef farmers and 64 per cent
of sheep farmers feeling confident about the sector’s future.
ENDS