where is value in our lamb?

Where is Value in Our Lamb?

8 September 2010P10043

Presentation to:

Growing Great Lambs Seminar

Waughs road

Feilding

Beef + Lamb New Zealand

– Is industry good organisation, started July 2004

– Farmer-owned

– Funded by levies mandated

under the Commodity Levies Act

(5 yearly referendum,

last was September 2009)

– Overseas offices in the

US, UK, Belgium,

Japan, Korea & China

– 13 Region Farm related Staff

Production

Inputs

Farm

Businesses

Processors Exporters

Importers

Local

Processors/

Manufacturing

Local

TransportInternational

Transport

Food

Service

Retail

C

O

N

S

U

M

E

R

S

GeneticsDistributors /

Wholesalers

Sheep & Beef Farm Survey

Since the 1950s, farm level data

Production, Prices,

Revenue, Expenditure, Profit,

Assets, Debt

Statistics New Zealand

Ag Statistics


Forecasts, SIL, R&D, Uptake

Farm connected

The Value Chain ……& Information Flows

Meat Company

Production Data

Procurement prices

Domestic Consumption


MAF; Export Data x Country


Forecasts, R&D, Uptake

Production connected

Overseas Data: USDA, OECD, EU, GTA

MLA, EBLEX, FAO

Trade Policy

Market Access

Market / Development / Position


Forecasts – Market Position Influence

Market and trade policy connected

NZ Sheep and Cattle Numbers1990-91 to 2012-13

25,000

35,000

45,000

55,000

65,000

75,000

19

90

-91

19

92

-93

19

94

-95

19

96

-97

19

98

-99

20

00

-01

20

02

-03

20

04

-05

20

06

-07

20

08

-09

20

10

-11

20

12

-13

Sh

eep

(0

00)

2,000

3,000

4,000

5,000

6,000

Catt

le (

000)

Source: Beef + Lamb New Zealand Economic Service

Statistics New Zealand. % change 1990 to 2012

Dairy +78%

Beef -10%

Sheep -43%

Australian Sheep Flock declined by over 108 million (-61%) since 1990 (June)

Australian Sheep Flock

Projection for 2009 & 2010

60

70

80

90

100

110

120

130

140

150

160

170

180

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

P

20

10

F

Million

GMC: December 2009

Export Dominance 2009-10

% Exported Exports $m

• Wool 91% $552

• Lamb* 92% $2,695

• Mutton* 94% $423

• Beef and Veal* 80% $2,189

• Dairy 96% $9,477

• Deer [$359m] + Other 96% $728

Pastoral Sector $16,064

*Includes co-products

June ending Year

Source: Beef + Lamb New Zealand Economic Service, SNZ

Export Lamb Shipped Product Mix1970-71 to 2008-09

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19

70

-71

19

75

-76

19

80

-81

19

85

-86

19

90

-91

19

95

-96

20

00

-01

20

06

-07

20

07

-08

20

08

-09

20

09

-10

Pe

r ce

nt

Chilled Frz Boneless Frz cuts Frz carcases


Lamb Exports

5-1010-2525-5050-75

75-100

100-200

> 200

Flows in '000 t cwe

Source: Gira

Export Lamb FOB Receipts2009-10 June year

Export Receipts $ (000s)

0

200

400

600

800

1,000

1,200

1,400

1,600

EU North

America

North Asia Middle East

$ (

000s)

Chilled Frozen


56%

66%

FOB $ per tonne

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

EU North

America

North Asia Middle East

$ p

er

tonne

Chilled Frozen


All Markets:

Chilled 25% of export tonnage

35% of export receipts

NZ Lamb Export Markets

2008-09, 2009-10 Lamb Exports(000 Tonnes Shipped, June Year)

0 50 100 150 200

European Union

North Asia

North America

Middle East

Pacific

Other

2009-10 2008-09

50% volume; 60% value


2009-10

Shipments

down 2.5%

UK Retail Meat PricesDomestic and Imported

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

Ja

n-0

4

Ju

l-0

4

Ja

n-0

5

Ju

l-0

5

Ja

n-0

6

Ju

l-0

6

Ja

n-0

7

Ju

l-0

7

Ja

n-0

8

Ju

l-0

8

Ja

n-0

9

Ju

l-0

9

Ja

n-1

0

Ave

rag

e R

eta

il P

rice

, G

BP

£ p

er

kg

Poultry Beef Pork Lamb (all)Source: Beef + Lamb New Zealand Economic Service

TNS

World Energy Prices

Source: FAPRI 2008

$140 (debt boom)

$80

NZ Lamb Compared to Other Lamb Sold in Britain

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.02

00

4 J

an

20

04

Ma

y

20

04

Se

p

20

05

Ja

n

20

05

Ma

y

20

05

Se

p

20

06

Ja

n

20

06

Ma

y

20

06

Se

p

20

07

Ja

n

20

07

Ma

y

20

07

Se

p

20

08

Ja

n

20

08

Ma

y

20

08

Se

p

20

09

Ja

n

20

09

Ma

y

20

09

Se

p

20

10

Ja

n

20

10

Ma

y

GB

P £

/kg

Retail Price of lamb sold in Britain (except NZ Lamb) Retail Price of NZ lamb sold in Britain


Global Trade Atlas

TNS

EU Lamb Price & Consumption

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%1

99

8

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

150%

170%

190%

210%

230%

250%

270%

290%

Rel Consumption

Rel Reference Price

% of total meat

consumption

% of average

meat price

Source: Gira

Supply Aside Consumer Trends

Also Affect Consumption

• Lamb is reserved for special occasions…

– Is expensive, and

– Is not considered consumer friendly.

• Given lamb’s comparative price point this will be

difficult to overcome.

• Frozen sheepmeat is not seen as fresh,

therefore, the taste is not as good (perception).

• Lamb is not seen as nutritional, or healthy when

compared to other meats.Source: Usage & Attitudinal Study of 750 consumers in seven markets (June 2010)

Farm-Gate to FOB Price Spread& Seasonality of Production

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

20

03

-De

c

20

04

-Ap

r

20

04

-Au

g

20

04

-De

c

20

05

-Ap

r

20

05

-Au

g

20

05

-De

c

20

06

-Ap

r

20

06

-Au

g

20

06

-De

c

20

07

Ap

r

20

07

Au

g

20

07

De

c

20

08

Ap

r

20

08

Au

g

20

08

De

c

20

09

Ap

r

20

09

Au

g

20

09

De

c

20

10

Ap

r

$/k

g

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

He

ad

(0

00

)

NZ Lamb FOB All Grades Lamb Lamb Slaughter


New Zealand Meat Board

Export Lamb Market Shares

$20 per

head

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 YTD

NZ Farm Gate 62 54 52 57 83 76

NZ FOB 90 87 88 94 113 109

Retail Value 171 177 174 158 177 173

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 YTD

NZ Farm Gate 36% 31% 30% 36% 47% 44%

NZ Farm Gate to FOB 16% 18% 21% 23% 17% 19%

NZ FOB to Retail 48% 51% 49% 40% 36% 37%

Total 100% 100% 100% 100% 100% 100%

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 YTD

Farm to NZ FOB 27.44 32.53 36.39 36.88 29.44 33.04

NZ FOB to Retail 81.19 90.25 85.62 63.34 63.72 63.26

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 YTD

UK 0.38 0.36 0.36 0.39 0.38 0.44

EU 0.55 0.52 0.54 0.51 0.44 0.49

US 0.70 0.65 0.72 0.76 0.59 0.73

TWI 0.59 0.55 0.59 0.61 0.50 0.60

Shipped Tonnes 420,655 436,375 448,428 437,384 397,897 411,552

Quota Utilisation (Dec Yr) 94.52 98.60 99.80 99.80 99.90 99.80

Exchange Rates & Volumes

$ / Head differences for 17 kg CWE lamb

% of Total Market

$ per Head 17 kg CWE lamb

New Zealand Lamb Export Profile

0

20000

40000

60000

80000

100000

120000

140000

160000

European

Union

North

America

North Asia Middle East Africa Other

ton

ne

s2005-06 2006-07 2007-08 2008-09 2009-10

Trade in

US$

Trade in

€ & ₤

NZ Exchange Rate Trend(2000 Jan = 1000)

700

800

900

1000

1100

1200

1300

1400

1500

1600

1700

18002

00

0 A

ug

20

01

Fe

b

20

01

Au

g

20

02

Fe

b

20

02

Au

g

20

03

Fe

b

20

03

Au

g

20

04

Fe

b

20

04

Au

g

20

05

Fe

b

20

05

Au

g

20

06

Fe

b

20

06

Au

g

20

07

Fe

b

20

07

Au

g

20

08

Fe

b

20

08

Au

g

20

09

Fe

b

20

09

Au

g

20

10

Fe

b

20

10

Au

g

Index

U.S. $ U.K. stg Euro


Reserve Bank of New Zealand

Since float, March 1985

NZ $ av 59 cents US Aug 10, 70 ¢

NZ $ av 36 UK pence Aug 10, 46 p

NZ $ av 0.51 Euros Aug 10, 0.55 €

Last 12

months

(Aug)

US $

+0.7%

UK £ +6.2%

EU € +13.3%

0

10

20

30

40

50

60

70

80

90

100

$ p

er

he

ad

$88.80

-30

-20

-10

0

10

20

30

40

19

90

-91

19

91

-92

19

92

-93

19

93

-94

19

94

-95

19

95

-96

19

96

-97

19

97

-98

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

$ p

er

head


Lamb All Grades $ per head

Lamb Market Change & Exchange Rate Effect

Export Lamb $ per head

Exchange Rate $

Market Change $

Exch. Rate per farm

2008-09 +$22,200

2009-10e -$36,800

$82.00

Export Lamb $ per head TrendAll Grades

30

40

50

60

70

80

90

100

110

120

20

00

Ju

n

20

01

Ju

n

20

02

Ju

n

20

03

Ju

n

20

04

Ju

n

20

05

Ju

n

20

06

Ju

n

20

07

Ju

n

20

08

Ju

n

20

09

Ju

n

20

10

Ju

n

20

11

Ju

n e

$ p

er

he

ad

12 month

av. $53.60

$88.80


$82.00e

2010-11 Lamb Price Prospects

USD 0.64 0.66 0.68 0.70 0.72

GBP 0.42 0.44 0.45 0.47 0.48

Euro 0.52 0.53 0.55 0.57 0.59

Farm-Gate Prices Received % change

$/head 0.68 to 0.72

Lamb 91 87 82 79 75 -8.3%

NZ Exchange Rates

2010-11 New Season Outlook Exchange Rates and Prices

And …………….

Export Sheep Processing

1996-97 2000-01 2008-09

Companies No. 16 16 20

Plants No. 37 34 37

Year Kill 000* 30,025 27,902 26,508

Max Week Potential 000* 1,570 1,476 1,288

Max Week Actual 000* 1,143 1,052 1,033

Av per Week 000* 591 548 511

Av as % Potential 38% 48% 40%

Av as % Actual 52% 51% 50%

No. Weeks at Max Actual 26.9 27.1 26.2


Lamb Market Outlook

• Short Term

– Decrease in supply from major suppliers i.e. Australia,

US and NZ is supporting per head returns

– Changing Product Mix to focus on higher margins

– Demand in recession focused on NZ strengths at

retail, lower priced product by trading down from food

service to retail

– Downside is effect at food service in US

– Procurement pressure

– Exchange rate GBP and EU concern.

Key Focus – Medium Term

• Better management of Uncontrollable.

• Step change is required otherwise economic issues and land use change will continue.

• Investment on-farm in productive assets…

– R&D that aligns with consumer positioning etc

Step Change – Medium Term

Medium Term

Opportunity

Sub Category Strategic Measure

Baseline

5-Year Goal What is it worth to NZ

farmer per year?

Supply Chain Efficiency Capacity Utilisation Current Utilisation at 50% Increase to 80% $5-10 per lamb?

Transportation Total cost as a % of end

retail value

Decrease to XX% ??

Culture and economic

signals between farmers

& exports

Supply Contracts Percentage of industry

supply contracted on a 12

month basis between

farmers & exporters

Increase to XX% ?? Has a lot of other

inter-linkages with

management of

margins and supply

chain efficiency

Management of in-

market margins

between export and

importer/retailer

Farmer return as a

percentage of end retail

value

Increase to or hold at

45%

Up to $20 per lamb.

Product Transformation Chilled product % of total meat production

sold as chilled product

Increase from 22% to

75%

??

Lamb Pelts Farmer return as

percentage of end retail

value

Increase from XX% to

XX%

$10 per lamb at the

smaller end of scale.

Debt Reduction Total debt and cost

of servicing this debt

per lamb

Total debt and cost of

servicing debt per lamb

Reduce to $XX per

lamb

$XX per lamb

Exchange Rate Management of

Exchange Rate

% of Total Product for

year covered forward

Increase to XX% $XX per lamb. Bigger

advantage, mgmt of

peaks & troughs.

40 Years of Economic Service

Analysis Shows

The Key Features of Top Farms are:

– High Lambing %’s

– High Calving %’s

– High Slaughter Weights

– High Wool Production per Sheep

– Low loss rates

All equal economic efficiency

KPI’s are about efficiency

output Kg Meat [& Wool] Gross $inputs Kg pasture DM Expend$

= =

KPI’s

– Lambing % farm control

– Wool Production per sheep farm control

– Lamb Weights [and growth rates] farm control

– Loss rates farm control

– Fertiliser per Ha or per SU farm control

– Price levels, meat, wool low control

– Farm expenditure per ha, su farm control

– Gross Margins sum of above, farm control

– Rate of Return land asset external

– Debt:Equity important if high debt

Quintile Rank – 20% Intervals

North Island Finishing Farms Ranked by Sheep Gross Margin 2008-09Quintile Stock Lambing % Sheep Sheep Sales Prime

Units excl hgts Gross Gross Lambs Lamb

per Ha. lambs Margin Margin Lamb Lamb Lamb Meat Prime Sales

$/SSU $ per ha Purchased Sold Production M/S $ per Ha

kg per ha kg per ha kg per ha $/hd

Low 10.5

Q2 11.2 96.9 32.73 214.30 15 44 70 91.70 222.20

Q3 10.4 111.6 46.67 316.88 14 78 102 89.71 351.97

Q4 10.3 122.6 69.63 405.69 14 83 106 90.66 377.08

High 9.2 128.7 96.36 454.68 34 103 96 94.23 522.01

Mean 10.3 115.3 59.25 352.39 15 63 78 91.58 301.13

Source: Beef + Lamb New Zealand Sheep and Beef Farm Survey

Carcase weight Equiv.

There is a clear performance stretch to improve on-farm profitability

KPI Measures

No Matter how performance is Benchmarked

– Gross Revenue per ha

– Net Profit per ha or su

– % Rate of Return on Farm Capital

– Gross Margin per su

– Earnings B4 Interest and Tax

It comes down to animal performance and stewardship

Summary

• Biggest uncertainty is the Exchange Rate.

• Overseas market outlook reasonable for

lamb

• Livestock performance for profit important

Material Supplied for Public use only

by agreement from

© 2010 Beef + Lamb New Zealand Limited also referred to as M&WNZ, Economic Service.

All rights reserved. This work is covered by copyright and may not be stored, reproduced or copied without the prior written permission of Beef + Lamb New Zealand Limited, Box 121, Wellington.

Phone: 64 (0) 4 473 9150, Fax: 64 (0) 4 474 0801

e-mail: [email protected]

Beef + Lamb New Zealand Limited, its employees and directors shallnot be liable for any loss or damage sustained by any person relyingon the forecasts or other information contained in this document,whatever the cause of such loss or damage.

Sheep & Beef Farm Profit before Taxper Farm, Constant 2004-05 $s

0

20,000

40,000

60,000

80,000

100,000

120,000

140,0001

99

0-9

1

19

91

-92

19

92

-93

19

93

-94

19

94

-95

19

95

-96

19

96

-97

19

97

-98

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

p

20

10

-11

f

Real Farm Profit

1990s decade av.

$44,750

2000s decade av.

$64,200


Sheep and Beef Farm Survey, All Classes Farm Lowest in 50 years

NZ:US$ 77¢

NZ:US$ 42¢

Wool Lamb, Beef and MilksolidsNominal Farm price trend, ¢ per kg

100

200

300

400

500

6001

99

0-9

1

19

92

-93

19

94

-95

19

96

-97

19

98

-99

20

00

-01

20

02

-03

20

04

-05

20

06

-07

20

08

-09

20

10

-11

e

Cen

ts p

er

kg

Linear (Wool) Linear (Milksolids) Linear (Lamb) Linear (Beef)

Dairy

Wool

Lamb

Beef


Livestock Improvement Corporation, DairyNZ.

Land Use Trend

Pastoral Land Area

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

19

90

-91

19

92

-93

19

94

-95

19

96

-97

19

98

-99

20

00

-01

20

02

-03

20

04

-05

20

06

-07

20

08

-09

20

10

-11

20

12

-13

Ha (

000)

Sheep Beef Deer Goat Dairy



-28%

+68%

Overall -19%-2.6 m Ha

1990 to 2012

Pastoral land Area 2010-11e

Dairy Farms 1.61 million ha

Dairy Support 0.61 million ha

• Dairy Total 2.22 million ha 20%

• Sheep & Beef 9.03 million ha 80%

• Total pastoral area 11.25 million ha 100%


NZ Sheep and Cattle Numbers1990-91 to 2012-13

25,000

35,000

45,000

55,000

65,000

75,000

19

90

-91

19

92

-93

19

94

-95

19

96

-97

19

98

-99

20

00

-01

20

02

-03

20

04

-05

20

06

-07

20

08

-09

20

10

-11

20

12

-13

Sh

eep

(0

00)

2,000

3,000

4,000

5,000

6,000

Catt

le (

000)


Statistics New Zealand. % change 1990 to 2012

Dairy +78%

Beef -10%

Sheep -43%

NZ Total Production

1990-91 to 2009-10

More Dairy +140% volume

More Beef & B Veal +20% volume

Lamb -1% volume

but lamb from 44% fewer sheep !

Productivity Comparison

1990-91 2009-10p

Lambing Percentage

(ewe)100.4 123.4 23 more lambs

Hogget lambs as % all

lambs-

3.4

Average Lamb Wt (kg) 14.35 17.60 +23%

Lamb sold kg/ewe 9.76 17.18 +76%

Wool Sold kg/head 4.59 5.31 0.5 kg carry over

Average Steer Wt (kg) 297 312 +5%

Milksolids per cow (kg) 260 328 +26%

NZ Export SlaughterCumulative by month

NZ Export Lamb Slaughter

2007-08 26.52 m

2008-09 22.51 m

2009-10p 21.42 m (-4.8%)

2010-11e 21.38 m (static)

[ewes (-0.6%) lambing -2.6% pts]

NZ Cattle Slaughter

2007-08 2.21 m

2008-09 2.34 m

2009-10p 2.25 m (-3.7%)

2010-11e 2.14 m (-4.8%)

Export Lamb 000 head

0

5,000

10,000

15,000

20,000

25,000

30,000

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

2007-08 2008-09 2009-10

Source: Beef + Lamb New Zealand Economic

Export Cattle 000 head

0

500

1,000

1,500

2,000

2,500

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

2007-08 2008-09 2009-10


NZ Lamb SlaughterSeasonal Supply by Month

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

20

04

Oct

20

05

Fe

b

20

05

Ju

n

20

05

Oct

20

06

Fe

b

20

06

Ju

n

20

06

Oct

20

07

Fe

b

20

07

Ju

n

20

07

Oct

20

08

Fe

b

20

08

Ju

n

20

08

Oct

20

09

Fe

b

20

09

Ju

n

20

09

Oct

20

10

Fe

b

20

10

Ju

n

head

NZ Local NZ. Export

Source: Beef + Lamb New Zealand Ltd - Economic Service

200

300

400

500

600

20

07

De

c

20

08

Ma

r

20

08

Ju

n

20

08

Se

p

20

08

De

c

20

09

Ma

r

20

09

Ju

n

20

09

Se

p

20

09

De

c

20

10

Ma

r

20

10

Ju

n

c/k

g

US c/Kg NZ c/Kg


Debt bubble

boom

difference

NZ:US

exchange rate

US Bull Beef Price Quotes 95 CL

US +14%

NZ +4%

US cattle herd

decreasing …….

93.7m 1 Jan 2010

July 2009 to

July 2010

Beef All Grades $ per head

0

200

400

600

800

1,000

1,200

$ p

er

he

ad

-300

-200

-100

0

100

200

300

19

90

-91

19

91

-92

19

92

-93

19

93

-94

19

94

-95

19

95

-96

19

96

-97

19

97

-98

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

e

$ p

er

he

ad


Beef All Grades $ per head

Beef Market Change and Exchange Rate Effect

Market Change $

Exchange Rate $

Exch. Rate per farm

2008-09 +$17,500

2009-10e -$19,300

Export Bull Beef ¢ per kg Trend270 – 295 kg

200

225

250

275

300

325

350

375

400

425

450

475

5002

00

0 J

un

20

01

Ju

n

20

02

Ju

n

20

03

Ju

n

20

04

Ju

n

20

05

Ju

n

20

06

Ju

n

20

07

Ju

n

20

08

Ju

n

20

09

Ju

n

20

10

Ju

n

Ce

nts

pe

r kg

12 month av. 308¢

350¢

345¢


Exchange

Rate

Sensitive

NZ Beef Export Markets

Beef and Veal Exports

(000 Tonnes Shipped, June Year)

0 100 200

North America

North Asia

South Asia

European Union

Other

Pacific

2009-10 2008-09

51% vo l; 4 6 % value

2 6 % vo l; 2 7%

value


3% volume; 7% value

7% value

Sheep & Beef Farm Interest per suDebt servicing increase

0

2

4

6

8

10

12

14

16

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

p

$ p

er

Sto

ck

Un

it


Sheep and Beef Farm Survey

+68%+53%

World Energy Prices

Source: FAPRI 2008

$140 (debt boom)

$80

ETS Update

Sector Entries:

• Forestry 2008

• Stationary Energy & Industrial Processes 1 July 2010

• Liquid Fossil Fuels (mainly transport) 1 July 2010

• Agriculture, Waste and all other emissions 1 Jan 2015

ETS Calculation Sheep & Beefper Farm

Projected Cost @ $25 per tonne of CO2-e in 2015

$ per kg

product

$ per farm Tonnes of

CO2-e per farm

(A) Meat & Wool Processing Costs

(Transportation & Meat & Wool

Processing)

0.02 2,150 86

(B) Farm Fuel & Electricity 0.01 800 32

Agricultural Emissions

(Assumed Baseline of 2007-2009

average)

0.03 2,300 92

Total 0.06 5,250 210

At 1 July 2010 to Dec 2012 50% of (A) + (B) = $1,475 per farm

Fonterra Figures – Dairyper Farm

Projected Cost @ $25 per tonne of CO2-e in 2015

$ per kg

MS

$ per herd Tonnes of

CO2-e per herd

(A) Fonterra Costs

(Transport & Milk Processing)

0.04 5,200 207

(B) Farm Fuel & Electricity 0.02 2,600 104

Agricultural Emissions

(Assumed Baseline of 2007-2009

average)

0.02 2,400 97

Total 0.07 10,200 408

At 1 July 2010 to Dec 2012 50% of (A) + (B) = $3,900 per farm

Summary – Domestic Scene

• Overseas markets reasonable for lamb

• Beef outlook function of US recovery from recession

• Big uncertainty is the exchange rate, grim outlook if this

remains export unfavourable

• Since 2004-05

– legacy of low prices received 2005-06 to 2007-08

– On-farm inflation up 28% since 2004-05

– Farm debt up 46%; debt servicing per Stock Unit up 60% includes drought effect

• Livestock performance for profit very important

where is value in our lamb?

Documents