The BNZ has studied the tea leaves and believes Fonterra farmers will be looking at a payout of $6.10 next season with earnings a share returning to 40c.
That’s a little down on this year’s forecast, which should give farmers $6.85 all up, but farmers will no doubt be heartened to see some semblance of calmness to the payout wave after a few years of stormy seas. Consistency of income is preferable to the highs and lows of the past few years and now farmers can hopefully budget with a bit of confidence.
Of course, costs, including tax, are also changeable and farmers will be keeping a close eye on the tax working group led by Sir Michael Cullen. Sir Michael says it is looking at an environmental tax and whether it could change farmer behaviour but it’s early days. Farmers will hope those annual profits won’t be gobbled up by the taxman.
Beef + Lamb New Zealand has also been studying figures and is picking sheep and beef farmers will have an income boost this year. It says farmers should enjoy a boost in pre-tax earnings of 39%. That’ll be welcome news for those in the higher country, many of whom have been battling drought in recent years. It’s good news that farmers are still able to make a buck at processing after most would have paid some eye-watering prices in the store market.
With B+LNZ also forecasting both beef and sheep meat returns to top $3 billion this year, things appear to be heading in the right direction in the medium as well as the short term. Heck, the industry body even puts in a good word for the processors.
As last week showed, though, the weather can always throw a spanner in the works. Here’s hoping the polar blast is a minor blip and not a sign of things to come this winter.
Bryan Gibson
