Red meat rebound
The red meat sector is poised for a strong rebound this season, with export receipts forecast to top $10 billion and farm profitability to almost double.
Its latest Economic Service Sheep and Beef On-Farm Inflation Report says while Consumer Price Index (CPI) data has the annual inflation rate at 6.9%, the latest on-farm inflation rate has hit 10.2% - the highest it's been since 1985-86 (13.2%).
BLNZ says it's concerned increasing regulatory requirements from the Government - such as freshwater and biodiversity rules - will stretch farmers even further. "There's a lot of costly regulation coming at farmer at present," says chief executive Sam McIvor.
"Given the importance of agriculture in driving our economy's recovery, it's critical that the Government gets its policy settings right."
McIvor concedes that many of the increased cost are outside of the Government's control, but he says it can help by ensuring any policy changes are needed, workable and cost-effective for farmers.
While on-farm inflation had been comparable with the CPI in recent years, the 2021-22 report shows farmers are now facing significant price increases in all but one of 16 input categories.
"Sheep and beef farm input prices increased by 10.2% in the year to March 2022, and when interest rates are excluded, input prices were up by 10.7%," says chief economist Andrew Burtt.
Burtt says the increase in farm input prices is largely due to the rise in cost of three core ares of expenditure: fertiliser, lime and seeds (+23%), interest (+5.9%) and repairs, maintenance and vehicles (+10.4%).
