More on plate for meat farmers

Better weather has helped maintain the number of lambs tailed on New Zealand farms this season. Picture / APN

Local and overseas conditions combine to give beef and sheep farmers reason to smile

While dairy product prices are falling, the same cannot be said for mutton and beef prices.

Beef and Lamb's economic service executive director, Rob Davison, said favourable weather, expected higher prices and a more export-friendly exchange rate mean improved returns for sheep and beef farmers.

The industry group's new season outlook for the 2014-15 season predicted the average before-tax sheep and beef farm profit would increase by 8 per cent on last season, to $110,800.

Davison said a 6.3 per cent lift in sheep revenue was largely responsible for the increase.

The international economy played a significant role - global growth was expected to reach 3.4 per cent this year and 4 per cent next year.

The three main currencies in which New Zealand agricultural products are traded - the US dollar, the euro and the British pound - are all expected to gain against the New Zealand dollar over the next 12 months.

Farm-gate prices for lamb and mutton are forecast to average $103 and $79 a head, up $3 on 2013-14 provisional prices.

Davison said that, while total sheep numbers were down on last season, the number of lambs tailed this spring was estimated to be similar to last spring - at 25.6 million - reflecting favourable weather.

"But export lamb production is forecast to decrease by 2.6 per cent, as farmers opt to hold on to more ewe hoggets as replacement breeding stock which is a positive indicator for the sector," he said.

Bull, steer and heifer farm-gate prices are forecast to increase 8.5 per cent.

The value of beef and veal meat exports is expected to rise 5.5 per cent on last season.

This reflects total volumes dropping 3.6 per cent, while average values rise 9.4 per cent because of expected higher international prices and a more favourable exchange rate, it said.

Agrifax's beef price index has risen for the past four weeks, and it is now just shy of the record level, set in September 2008.

In its latest commodities report, ASB Bank said beef prices could exceed the records this year.