Sheep and beef farmers can expect continued strong red meat returns in 2026–27 but Beef + Lamb New Zealand is warning that margins are likely to tighten.
A stronger New Zealand dollar is likely to limit export returns, while rising input costs and the risk of dry El Niño conditions are expected to place pressure on farm margins, according to B+LNZ’s New Season Outlook for 2026–2027 (year ending September).
Average farmgate prices are expected to soften slightly, but these are off historical highs.
Average lamb farmgate prices are forecast to decrease 8.0 percent, with beef cattle prices decreasing 4.5 percent, while farm expenditure is expected to rise 4.2 percent.
Farm Profit Before Tax is forecast to average $267,200, down 20 percent on the provisional record season average of $335,500 in 2025-26, but is still well above the five-year average.
B+LNZ Chair Kate Acland says that even with forecast decreases in both farmgate prices and profit, the new season returns promise to be very good. They are still well above the 2024-25 season and above the five-year average.
She notes the ‘exceptional’ 2025-26 results came after two hugely difficult years where many beef and sheep farmers were operating at a loss. Recent prices provided a much-needed turnaround.
“Stronger cashflow through 2025‑26 has allowed many farm businesses to repay debt, catch up on fertiliser programmes, complete deferred repairs and maintenance, and reinvest in the farm business after several low‑profit years,” she says.
“Improved farm profitability has a powerful ripple effect. Sheep and beef farmers and processors spend $64 million a day on goods and services across New Zealand. When indirect impacts are included, that rises to $133 million a day flowing through the New Zealand economy.”
Looking ahead, global red meat supply remains tight and demand from key markets continues to support strong prices. However, slower global economic growth, cost-of-living pressures and a stronger New Zealand dollar are expected to limit further price increases in the coming season.
Combined beef, lamb, mutton and wool export receipts are forecast at $12.6 billion in 2026-27, although the outlook differs across products:
- Beef and veal: export receipts are forecast to increase 4.2 percent to a record $6.75 billion in 2026-27 with an 8.2 percent increase in production and higher export volumes more than offsetting a slight easing in export prices (-3.8 percent) from 2025-26 levels
- Lamb: export receipts are forecast to fall 5.9 percent to $4.41 billion, as lower production reduces the volume available for export and export prices also ease slightly (-3.6 percent) on 2025-26 levels
- Mutton: export receipts are forecast to ease 0.4 percent to $880 million, with lower export volumes largely offset by a small increase in export prices (+1.2 percent).
- Wool: production and raw wool export volumes are both forecast to fall in 2026-27. Higher export prices (+3.1 percent) offset the lower volume, leaving raw wool export receipts down 1.2 percent to $567 million.
Acland notes that events in international markets could negatively impact New Zealand, such as the US investigation into lamb imports and volatility in global beef export flows caused by China’s beef safeguard.
“In addition, the conflict in the Middle East is leading to higher fuel and fertiliser costs. Farmers also need to consider the risk that the forecast dry El Niño conditions could inhibit pasture growth, leading to lower liveweight gains, lighter carcass weights and less production. These factors will all impact farm margins.”
Although the red meat sector is in a stronger position than it has been for some time, farmers know conditions can change quickly, Acland says. They need to focus on building financial resilience, improving productivity, and planning for both climate‑related shocks and market downturns.
- Download the New Season Outlook 2026–27 full report (PDF, 2.9 MB)
- Download the New Season Outlook 2026–27 summary report (PDF, 105KB)