Farmgate lamb prices are forecast to fall 8% and beef cattle 4.5% in the new season while farm expenditure rises 4.2%, according to Beef + Lamb New Zealand's new-season outlook, which blames a rising New Zealand dollar, higher input costs and the risk of El Niño. Farm profit before tax is forecast to average NZ$267,200, 20% below the provisional record of $335,500 in 2025-26 but still well above the five-year average.

Chair Kate Acland said returns would still be very good — above 2024-25 and above the five-year average. Recent prices and stronger cashflow through 2025-26 allowed many farm businesses to repay debt, catch up on fertiliser programmes, complete deferred repairs and maintenance and reinvest after several low-profit years.

Global red meat supply remains tight and demand from key markets supports prices, but slower world growth, cost-of-living pressures and a stronger dollar are expected to cap further gains. Risks include the US investigation into lamb imports and the volatility in global beef flows caused by China's beef safeguard.

The Middle East conflict is lifting fuel and fertiliser costs, Ms Acland said, and farmers must also weigh the forecast dry El Niño, which could restrict pasture growth and mean lower liveweight gains, lighter carcasses and less production.

Her advice is to build financial resilience, improve productivity and plan for both climate shocks and market downturns — and, as farmers think about next year's winter forage crops, to consider carefully what to plant and where.

Source: Rural News Group