This report summarises the results of a financial survey of sheep and beef farms across the central North Island, carried out by AgFirst through June 2020.
The key points explored in the report are:
The main aspect of the 2019/20 season was a severe drought, which adversely impacted production and profitability on most farms. This was exacerbated by Covid-19, which saw significant delays in getting stock killed.
Some rain with mild temperatures through May and June has seen pastures recover on easier country, but pasture covers are still short in many steeper less fertile hill country areas. Ewe condition over tupping was less than desirable on many farms, and consequently a lower lambing percentage is expected in the 2020 spring.
Net cash income on the model farm was up 2% in 2019/20 compared with 2018/19, largely on the back of a reduction in stock numbers, particularly cattle, as a result of the drought. Farm working expenditure was held similar to 2018/19 levels.
Budgeted income for 2020/21 is well down (22%) as a result of the reduced lambing percentage, lower expected lamb returns, and less cattle income as stock are retained to build numbers up again. The current net result is an expected deficit for the 2020/21 season.
Overall, the farm is continuing to struggle to generate a surplus to cover other required expenditure, such as development, debt repayment, and expected environmental compliance costs.