The 2009 MAF pastoral monitoring national sheep and beef budget has been released and shows EFS /ha is predicted to be half what is was last year. They are budgeting on an average lamb of $75/hd, which according to Rob Davison M&WNZ Economic Service is too optimistic on recent currency levels. Lambing percentage reflects the good conditions at 124% but an average wool price of $2.12/kg reflects the poor state of that sector. Cattle income is predicted to be at a level lower than the past four years and reflects the pressure the high US exchange rate is putting on beef. Farm costs are expected to increase from last year to a $44 a su but interest costs are budgeted to fall. Overall this model predicts a cash deficit and the need for more borrowings as well as a fall in the value of total assets and equity. Not a good look to start a year that only a few months ago held so much promise.
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