That was a 6.6% rise on last year’s $84,600 average.
On an inflation-adjusted basis, the earnings were expected to be only marginally higher than in 2004-05, well above a 2007-08 low but well below the high of 2011-12.
North Island sheep and beef farms were expected to be more profitable than South Island farms on average, though the extensive high-country farmland areas in the south skewed the averages.
B+LNZ used an exchange rate of US$0.69 in estimating earnings over the year though the actual rate in the main export season from November to June was the key, chief economist Andrew Burtt said.
It was lower than the current rate but major banks expected an easing in the dollar against the important trade currencies – the US dollar, sterling and euro.
Exchange rate movements had a significant impact on earnings with 10% rises or falls from the mid-rate of US$0.69, producing a 13% fall in forecast earnings or a 16% rise respectively.
Based on the average farm size and stock units, national gross farm revenues (assuming the mid-rate) were expected to be $469,900.
That was mostly made up of:
SHEEP, the largest revenue item, slipping 0.4% to $201,000 with fewer lambs sold at slightly lower prices than in 2016-17.
WOOL up 10% to $41,100 with more wool sold, including volumes carried-over from the previous year when farmers held supply back because of poor prices. A slight price rise was forecast.
CATTLE revenue up 1.1% to $131,500, expecting a small lift in cattle sold but with a softer price outlook. The impact varied between the islands, with cattle making up 40% of North Island revenues but only 17% in the south.
DAIRY GRAZING slipping 1.8% to $26,800 as some farmers moved to running their own beef cattle for better returns.
CASH CROPPING up 4.8% to $46,200 though that was 5% lower than the 10-year average.
Total sheep and beef farm revenue at the farmgate was expected to be about $5.3 billion, a 1.6% lift year-on-year.
B+LNZ noted gross revenues were used for buying goods and services for the farm business, tax, debt reduction and personal living expenses.
Average farm expenditure was forecast to rise 0.5% to $378,700, with higher fertiliser costs offsetting reductions in interest and repairs and maintenance.
Fertiliser inputs were expected to increase in the North Island with some catch-up after difficult conditions including wet air-strips and poorer cashflows last year but to decrease in the South where applications in recent years were above average levels.
B+LNZ expected some price differentiation to be a factor.
Though slightly lower than a year earlier, interest costs remained the largest individual item, just ahead of fertiliser.
Feed and grazing costs were expected to drop slightly, for a second year, from the impact of the 2015-16 spike caused by the severe Canterbury-Marlborough drought.
Average profitability in the North Island was ahead of the South Island, which had higher revenues and expenditure.
NORTH ISLAND sheep and beef farms were expected to average pre-tax earnings up 15% at $104,000, with a lift in all revenue sources to a total $422,700. Sheep and cattle provided 81% of revenues with sheep slightly higher.
Expenditure was also up considerably at $318,700 for 2017-18, driven by higher repairs and maintenance as well as fertiliser because of recovery work on both hill country and intensive finishing properties from autumn storms in northern areas and some catch-up on the east coast, which had 53% of the North Island sheep flock.
SOUTH ISLAND pre-tax profits were expected to fall nearly 4% to average $74,700.
Gross revenues were expected to be 1% lower at $521,000 with reductions in sheep, cattle and dairy grazing returns, which made up 68% of total revenues. Wool revenues increase about 6%. Sheep provided about 44% of gross revenues.
Total South Island expenditure was expected to fall slightly to $446,300 with reductions across most items.
B+LNZ said the North Island had 49% of the sheep flock, 70% of the beef cattle herd and 59% of dairy cattle.
Its forecasts were for the financial year to June 30 though the export season ran from October 1 to September 30.
The weighted average sheep and beef farm was estimated at 630ha carrying 2601 sheep, 337 beef cattle and 24 deer, for a total 3982 stock units.
