Landcorp Farming, New Zealand's biggest farm business, expects Fonterra's payout to slip next year and its own earnings from beef exports to fall, reflecting the high kiwi dollar.
The state-owned enterprise is "cautiously optimistic" about 2012, with prices "easing from their highs of the past year" but still underpinned by global demand. It posted a 322 per cent jump in operating profit for the 12 months ended June 30 to $42 million and the 2012 may be "slightly behind" that in the current year, said chief executive Chris Kelly.
"We don't believe Fonterra can achieve the same payout because of the high kiwi," he told BusinessDesk.
Beef would be "slightly back" mainly on the strength of the currency against the greenback, which erodes the value of sales into the US ground beef market. Landcorp is "reasonably bullish" on sheep, expecting the same level of income or better, while deer would be at about the same levels as in 2011.
The New Zealand dollar has advanced 27 per cent against the US dollar in the past two years, to reach a post-float high of 87.98 US cents on July 29. The trade-weighed index has gained 14 per cent in that time, peaking at 75.21 on August 1, the highest since mid-2007.