New Zealand sheep and beef farmers can expect continuing strong returns, with average farm profit forecast to climb to $287,600 per farm in 2025–26 – nearly double last season’s result, according to Beef + Lamb New Zealand (B+LNZ).
Download full Mid-Season Update report (PDF, 1.84MB)
The Mid-Season Update report by B+LNZ’s Insights team marks a sharp shift in fortunes for the red meat sector that has weathered two difficult seasons, with the latest data reflecting strong global demand for beef and lamb and tightening supply.
Real farm profit before tax (FPBT), accounting for inflation, is expected to sit about 80 per cent above the decade average.
B+LNZ chair Kate Acland said the report painted a positive picture for the sector with farmers cautiously optimistic.
“Farm-gate returns for 2025-26 have moved materially since our New Season Outlook in September, with stronger global red meat demand and tighter international supply underpinning livestock prices here at home.
“This is a welcome lift for New Zealand’s sheep and beef farmers.
“Farmers are expected to generate $8.5 billion on farm this year and spend $16 million every day on goods and services, largely in their local communities – so this is great news for regional New Zealand and the wider economy.
“However, it’s important to keep this in perspective. Many farmers are only just recovering after two years in the red, and there’s still a high degree of uncertainty with geopolitical risks on many farmers’ minds, including the US tariffs situation and the ongoing conflict in the Middle East.
“We are seeing volatility in key input costs because of the disruption to global supply chains. As the season progresses, we’re likely to see pressure come back through fuel, freight and fertiliser costs. Farmers are aware that while revenue is improving, costs can move just as quickly.”
However, market fundamentals are sound with strong demand for beef into North America and for lamb into the European Union and the United Kingdom, said Acland.
“Demand and pricing in China remains softer, but overall the global picture is far more positive than it has been in recent years.”
The average lamb price is forecast to reach $10.28/kgCW, adult sheep $5.55/kgCW, and all-cattle $7.59/kgCW.
Wool prices are also showing signs of meaningful recovery after several challenging years, although much of the lift is being driven by lower stocks globally. New Zealand wool production is estimated to be similar to last year but overall down 15 per cent on five years earlier, reflecting 10 per cent fewer sheep and lower wool production per head.
Regional outlook
On the East Coast, FPBT is forecast to double to an average $330,300 per farm, with EBITRm up 50 per cent to $454,300, supported by strong lambing results.
In Northland, Waikato and Bay of Plenty, FPBT is set to rise 73 per cent to $324,500, with EBITRm up 43 per cent to $401,300.
Exceptional hogget prices, heavier autumn-born cattle and abundant feed have all contributed to the lift.
Taranaki-Manawatū farms are expected to see FPBT increase 69 per cent to $245,600 per farm, with EBITRm up 30 per cent to $357,300, driven by excellent pasture growth and strong livestock performance.
In Marlborough and Canterbury, FPBT is forecast to double to $260,300, with EBITRm increasing 48 per cent to $385,100, reflecting a continued recovery following drought conditions in 2023-2024.
Otago-Southland is also set for a significant rebound, with FPBT doubling to $274,500 per farm and EBITRm rising 45 per cent to $411,300. High Country Class 1 farms have seen strong red meat revenue, while fine wool has also played an important role.
Overall lamb production for 2025-26 is now expected to increase slightly, rather than remain steady as previously forecast, following stronger-than-expected lambing results.
Despite the slow start to the season, cattle production is also estimated to lift slightly on the previous season and overall be higher than originally forecast.
The number of lambs processed for the 2025–26 season is forecast to rise by 2.6 per cent to 17.5 million head, while adult sheep processing is expected to fall 9.2 per cent to 3.1 million. Cattle processing is set to increase by 1.1 per cent, largely driven by higher cow numbers.
Acland said while the production numbers were encouraging, farmers would remain focused on resilience.
“There’s no doubt the red meat sector is in a stronger position than we’ve seen for some time, but farmers know conditions can change quickly.
“The focus now is on making the most of the improved returns while building resilience for whatever comes next.”
Farmers can compare their farm business with similar farm classes in their region using benchmarking resources available on the B+LNZ website.
The full Mid-Season Update report (PDF, 1.84MB) and a summary (PDF, 332KB) are available on the B+LNZ website.
ENDS
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