Source: and
Sheep and beef cattle farmers are facing challenges due to rising purchase costs, driven by global shortages of oil and wheat. This scarcity has led to increased prices for essential supplies like feed, fertiliser, and fuel. Moreover, New Zealand farmers have grappled with droughts in recent years, along with severe flooding in early 2023, causing livestock losses and significant property damage. Following a robust 2021-2022 season, the average pre-tax farm profit for all sheep and beef farms in 2022-2023 is projected to decrease by 31%, primarily due to rising input costs and declining export prices. This is compounded by the expected drop in key meat export prices, as the global cost-of-living crisis strains household budgets.
Export Revenue
Meat and Wool export revenue sits at $12.4 billion as at March 2023 and is forecast to decrease to $11.9 billion by the end of June 2023 (a 3.0% decrease from June 2022). Export revenue for Meat and Wool is forecast to further decrease over the next two years due to lower meat prices in key meat categories.
Meat and Wool exports accounted for 22% of total export revenue in the food and fibre sector for the year ending March 2023, with China the largest export market (37%), followed by the United States (20%), and the European Union (excluding the United Kingdom) (112%).
Across individual export products, Beef, Veal and Lamb have contributed the most while Carpets and Other Wool Products have contributed the least to overall annual export revenue since 2020 for the Sheep, Beef, Deer and Wool farming industry group.
Export revenue for the Sheep, Beef, Deer and Wool farming industry group increased substantially (by $2 billion) between 2021 and 2022, and, while initial forecasts suggest a decrease in export revenue through to 2024, export revenue remains strong.
Across individual export products, Beef and Veal, and Lamb are collectively forecast to contribute the most (65.5% by June 2023), while Carpets and Other Wool products are forecast to contribute the least (<1% by June 2023) to overall export revenue for the Sheep, Beef and Deer Farming and Wool industry.
In terms of long-term trends, export revenue from Wool, Hides and Skins, and Carpets and Other Wool Products has been decreasing, although Carpets and Other Wool Products appears to have reached a plateau. Export revenue from Beef and Veal, Mutton, Lamb, and Other Meat Products showed increasing trends up to 2022, but export revenue is forecast to decline through to 2025. Demand fell for beef and lamb from China due to COVID-19 lockdowns and slow economic growth, and it is forecast that global demand for prime beef and lamb will remain subdued, impacting on export revenue.
GDP Trend
The Sheep, Beef, Deer and Wool Farming industry contributed $5.2 billion to GDP in 2022-2023 and is forecast to increase at an annualised rate of 1.9% over the next five years to $5.7 billion in 2028-2029. Sheep and Cattle farming contributed $3.5 billion to GDP in 2022-2023, and Wool wholesaling contributed $49.8 million.
Note that in the source for GDP estimates, Shearing has been combined with cropping and agricultural support services. It is not possible for us to separate out the Shearing data from this estimate. It is reported here for context and completeness, but most of the contribution for this category will be related to agricultural support services (see Support Services industry).