The MAF's Pastoral sector overview once again highlights significant issues of poor profitability facing farmers in NZ this year and into the future.
Sheep and beef farmers are predicted in 2010/11 to again receive low returns to reinvest, although most are in satisfactory equity positions. Return on investment is negative as farm values fall by about 20%. Ever increasing costs and income restraints due to weather and currency pressures are restricting farm profits in that sector.
The dairy sector budget looks much healthier but it needs to be, as that sector is carrying much more debt, and analysts predict repayment a priority in this years budget. Average debt servicing is about $1.47/kg m/s on the 160 dairy farms monitored, and with FWE at $3.37, dairying has now locked itself into needing a $5 payout to break even.
Deer profits are predicted to be stable in the incoming year but the farm profitability issues that affect the sheep sector also occur here.
Look here for the full MAF pastoral sector overview .
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