The new profit estimates came despite global headwinds. Photo: RNZ / Nate McKinnon
Strong farmgate prices, low interest rates and tight supplies are helping drive record profit estimates for New Zealand's sheep and beef farmers this season, despite global headwinds.
Industry group Beef and Lamb New Zealand's new season outlook, which surveyed 500 farms of all sizes nationwide, showed it expected farm profits to increase to an average of $166,500 before-tax per farm for 2025/26.
Profitability was expected to rise across all regions with East Coast farmers expecting the largest swing, but regions with lower livestock numbers like Taranaki recording very marginal profits].
Red meat exports into the United States were now facing 15 percent import tariffs.
Chairperson Kate Acland said even in light of the US tariffs, the new season outlook was positive due in part to continued tight global supply of red meat.
"Even with tariffs being imposed by the United States, New Zealand is still benefiting from robust international demand, particularly from the US, Europe and the United Kingdom," she said.
"Consumers in those markets are paying more for beef and lamb, despite high inflation, which is helping hold prices up."
Between the two islands, there were similar stock unit numbers forecast but fewer hectares of farmland in the South Island, which saw a greater proportion of profits sitting with North Island farmers over the South.
Last year, good prices and easing interest rates also helped profitability rebound to an average of $138,700, according to the survey.
But the year prior - in 2023-24 - profits dived to their second lowest level in 30-plus years at $18,914 - with 40 percent of farm businesses recording a loss.
Acland said the year ahead was also not without its challenges.
"Tariffs, currency swings, and ongoing land-use change to forestry could all chip away at the gains," said Acland.
"Farmers have reason to be optimistic, but also every reason to keep planning carefully, benchmarking performance, and reinvesting in areas that will carry their businesses forward."
Beef and Lamb expected the sector to generate $7.2 billion in farmgate returns of which around $15.5 million will be spent locally in rural New Zealand.
Australia's lower forecast sheep exports later this year were expected to further support sheepmeat prices, Acland said.
Furthermore, prices across all wool types are projected to increase this season, nearing the cost of shearing for most, thanks to solid demand from China and India.
Beef and Lamb NZ New Season Outlook - key numbers for 2025/26:
- Lamb: Up to $9.36/kilogram clean weight
- Mutton: Down to $3.66/kilogram clean weight
- All beef: $6.85/kilogram clean weight
- Lamb processing: $16.7 million head
- Cattle processing: Down to 2.46 million head
