Invercargill-based Alliance Group has recorded an operating surplus of $42.1 million from a turnover of $1.5 billion for the year to September 30. It will make an extra payment of $15m to its farmer shareholders related to the livestock they supplied, as well as pay a 5c full imputed dividend, worth $2.8m, based on share holdings reports The Southland Times. A bonus issue of 18.6 million shares is also planned this year so the company’s farmer owners can share in its growth and receive a larger share of its equity.

Chairman Owen Poole said the company had recorded a strong profit and provided “very good returns” with lamb prices at record levels.”It is somewhat unfortunate that we reflect on a successful year at a time when an unhelpful New Zealand dollar looks set to undermine returns in the year ahead,” he said.

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Sheep farmers’ returns look like plumbing the depths seen before last year’s boom unless the NZ  dollar takes a dive reports Rural News. Meat & Wool NZ economic service director Rob Davison says last week’s post-float record for the kiwi against Sterling, combined with continued strength against the Euro and US dollar, suggests the average lamb price will be back to $66.‘That’s not a good price given there has been a 21% increase in on-farm inflation in the last three years.’

Average prices achieved in 2005-06, 2006-07 and 2007-08 were $56.20, $53.60 and $57.90 respectively. Last year’s lift to $89 was about 55% currency driven and 45% market related. Fortunately, those in-market gains look like holding with a lamb crop similar in size to last year, says Davison.

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Deer farmers are eyeing increased profitability this year but have been warned not to rely on a low kiwi dollar reports Rural News. The NZDFA says venison producers have enjoyed good returns this season and the outlook for venison is encouraging. However chairman Bill Taylor says deer farmers must be aware of the effect of the weaker currency and the danger of continuing to rely on its low value for continued prosperity. ‘I’m confident, however, that the lower volumes of venison and velvet that will be produced this year will mean improved farm returns.’

Venison production for the 12 months ending December 2008 was 591,000 deer, 6% down on 2007 and the industry expects a further drop in production this year. Venison exports last year reached $316 million, up $95m or 42% on 2007 despite similar volume of exports. The higher return was a result of higher market prices and a depreciating NZ dollar against the major trading currencies.

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Nearly 40% of wool on offer at last week’s combined North and South Island sale – the largest of the season – failed to sell in what proved to be a bloodbath for vendors. But the story was a bit rosier for fine wool at Thursday’s Melbourne wool sale, the average greasy price rising from 891c a kilogram to 967c reports The ODT. At the New Zealand sale, with a strengthening currency eroding returns for crossbred wool, limited demand and a large offering of 29,641 bales, prices eased for virtually all wool on offer. A report by Wool Services International said compared with the sale two weeks ago, fine crossbred fleece was 3.5% to 7% cheaper, and some types were up to 11% cheaper.

Good-coloured crossbred fleece was 2.5% to 8% cheaper, some poorer types falling by 7% to 9%. Coarse second-shear and first lamb’s fleece fell 5% to 9% and oddments by 4% to 10%. The only wool to firm in price was fleece which was slightly off-style: it was 1% to 2% dearer. The next crossbred sale will take place in Christchurch on April 2, with 7000 bales on offer.

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