The New Zealand red meat sector is on track for a strong rebound, with farm profitability and export returns expected to rise significantly in the 2024-25 season, according to a new report.
The Beef and Lamb New Zealand’s (B+LNZ) mid-season update said that global demand, particularly from the UK, EU, US and Canada, has remained strong and helped to offset weaker demand from China.
As a result, the report stated that export receipts are forecast to increase by NZ$1.2 billion on last year to reach NZ$10.2 billion in 2024-25, despite lower overall export volumes.
New Zealand
Kate Acland, B+LNZ chair, said that the improved global market conditions are encouraging but challenges remain for New Zealand farmers.
“This is a welcome turnaround for farmers following a tough 2023-24 season and a great result for New Zealand. Strong demand and a lower New Zealand dollar have lifted red meat prices.
“There are, however, risks on the horizon. We are keeping a very close eye on US trade policy developments which have the potential to create global market volatility,” she said.
The report outlined that farm-gate prices in the country have lifted significantly this season.
Lamb prices are forecast to reach NZ$155 (€82) per head, up 20% from last season and 9% above the five-year average.
Mutton prices are expected to rise to NZ$90/head which is a 70% increase on last season.
New Zealand cattle prices are projected to hit record levels, with an all-beef price of €6.18/kg, 16% higher than last season and 20% above the five-year average.
As a result, farm profitability is expected to improve. The average farm profit for 2024-25 is forecast at NZ$106,500 (€56,500) nearly double last season’s $56,400 (€29,900), but still below the five-year average.
Despite the positive forecast on profitability, Acland noted that “costs remain a concern”.
“While revenue has improved, farm input costs have risen 33 percent over the past four years, meaning profitability is still below long-term sustainable levels,” she said.
Economy
The report highlighted that the red meat sector continues to make a significant contribution to the New Zealand economy.
This season, sheep and beef farmers are expected to generate about NZ$6.4 billion in income.
B+LNZ said that these farmers spend around NZ$15 million on goods and services every day, with 80-90% of that money staying in local communities, helping businesses, and creating jobs.
While China remains an important market, New Zealand exporters have diversified, increasing shipments to markets where demand is stronger.
Constrained supply from New Zealand and record-low US cattle numbers have further supported farm-gate prices.
“We are seeing positive signs for the sector, but uncertainty remains.
“Farmer confidence is slowly recovering, but regulatory uncertainty around climate change, freshwater and other policy issues continue to weigh heavily on their minds.
“Stability in these areas is critical for long-term confidence and investment.
“New Zealand’s red meat sector is resilient, and with the right policy settings, we can build on this recovery and strengthen our industry for the future,” Acland said.
