Sheep and beef incomes in New Zealand are forecast to increase by 35% for the 2013/’14 season, according to Beef + Lamb New Zealand’s (B+LNZ) latest forecast, with better pricing and strong demand driving this.

The report outlines improved product prices which are expected to drive average sheep and beef farm profit up by 35% on the drought-affected level of last season. The Mid-Season Update estimates that farm profit before tax for the 2013-14 season will rise to an average of $113,700 (€70,000) per farm.

B+LNZ Economic Service Chief Economist Andrew Burtt says total gross farm revenue is expected to increase by 12 per cent in sheep revenue. This season’s forecast average lamb price is NZ$100 per head (€62) – up 18% on last year, and 2.5% higher than the average for the previous five seasons. “Reduced lamb availability in New Zealand and Europe, combined with strong demand for lamb from Asia and the Middle East, is expected to support lamb prices,” Mr Burtt said.

Approximately 25.6 million lambs were tailed in spring 2013, down 1.9% on the previous year. Breeding ewe numbers remain static reflecting a stabilisation of the national ewe flock.

Mr Burtt says the country’s overall export lamb production to September 30, 2014, is expected to be down 3.5%, to 362,900 tonnes carcass weight. “In 2013-14, export lamb slaughter is expected to decrease 5.3% compared with a high slaughter in 2012-13 which was pushed up by widespread drought. This season’s decline in numbers is expected to be partially offset by a 1.9% estimated rise in the average carcass weight, to 18.3kg, the second highest average carcass weight.”

The season’s total export cattle production is estimated to decrease 1.1% to 573,000 tonnes carcass weight, following last year’s high processing numbers, which were driven by the North Island drought.

“Internationally, the US total cattle herd is around 88 million head – the lowest January inventory since 1951. US exports are expected to drop, by about 8%, while beef imports should increase about 1%,” Mr Burtt says. “Meanwhile, total Chinese beef imports are projected to grow by more than 15% in 2014. Despite this significant demand from China, the US is expected to remain New Zealand’s largest market for beef and veal exports.”