The South Island drought and record beef prices have caused Beef and Lamb New Zealand to revise its profit outlook for sheep and cattle farmers.
Photo: RNZ
At the start of the season six months ago, it was predicting an average pre-tax profit of about 110-thousand dollars for sheep and beef farmers.
In its mid season update, it is now forecasting a sizeable gap between the North and South Islands.
Beef and Lamb's chief economist, Andrew Burtt, said southern farmers were losing out on two fronts.
"Drought has been one factor that's led to a revision of South Island forecasts and in the North Island the other big factor has been the sheep to cattle ratio.
"So with relatively more cattle to sheep in the North Island, and strong international prices for beef and therefore cattle, there's been a significant improvement of nearly 20 percent in the North Island, while there's been a decrease in revenue of about 20-percent in the South Island."
That would give North Island sheep and beef farms a pre tax profit of more than $117,000, and South Island farmers, a $100,000 profit.