Sheep and beef farm profits are predicted to halve this season, as the full impact of current lamb prices and drought kick in, Beef and Lamb New Zealand says.
Its mid-season update estimates farm profit before tax for the 2012-13 season will fall 54 per cent on last season, to an average of $73,000 across New Zealand.
This is largely due to sharply lower lamb prices and a consequent 27 per cent decrease in sheep revenue, Beef and Lamb NZ's economic service said.
The service's executive Rob Davison said lamb numbers were up, thanks to a 123 per cent lambing last spring and more hoggets producing lambs. However, this was not sufficient to offset the lower lamb price and impact of drought.