Source
https://beeflambnz.com/knowledge-hub/PDF/sheep-and-beef-farm-inflation-report-2023-24.pdf — original source (opens in a new tab; the file is not redistributed)
Beef + Lamb NZ — Sheep and Beef On-farm Inflation 2023-24
The B+LNZ farm-INPUT-PRICE escalation index — the food/livestock analogue to RT_368's civil-cost escalation, and the report CR_044's dropped per-ha figures traced to
Beef + Lamb New Zealand Sheep and Beef On-farm Inflation 2023-24 (P24002, June 2024, Economic Service; lead analyst Angie Fisher). An annual index of the change in prices paid for farm inputs (fertiliser, fuel, interest, R&M, insurance, animal health, wages, etc.) — explicitly NOT a change in total farm expenditure, and NOT a farm P&L. On-farm inflation was +2.8% in the year to March 2024 (after +16.3% the prior year); Interest (+12.0%) was the single biggest driver, contributing half the total; underlying inflation excluding interest was +1.7% (dragged down by Fertiliser, Lime & Seeds −4.2%). Read verbatim (pdftotext -layout); every figure page/table-traceable. ⚠ This is an index of percentages — it carries NO dollar values; it is a de-dating/escalation multiplier, not a cost cell. It is whole-farm-P&L weighted (includes interest, rent, depreciation) — for a debt-free self-sufficient community the underlying (excl-interest) series is the more relevant rate. DISTINCT from OT_091 (the per-ha $ P&L) and OT_082 (hill-country factsheet).
Summary
The Sheep and Beef On-farm Inflation report is Beef + Lamb New Zealand’s annual measure of the year-on-year change in the prices sheep and beef farms pay for their inputs — an inflation rate, not an expenditure total (it isolates price change and holds input volume constant). It is built on Statistics New Zealand’s Farm Expenses Price Index (FEPI, March-quarter Business Price Indexes), with interest and depreciation calculated independently and every category weighted by a three-year moving average of actual on-farm expenditure from the B+LNZ Sheep and Beef Farm Survey; GST is excluded and the index is based to 2004-05 = 1000.
For the year to March 2024 on-farm inflation slowed to +2.8% (from +16.3% the previous 12 months), but the cumulative burden remained heavy: prices rose +30.8% over five years and +35.9% over ten years, above consumer price inflation (CPI +4.0% in 2023-24; +23.4% / 5 yr; +30.4% / 10 yr). Interest (+12.0%) was the dominant driver — with an 11.4% expenditure weight it contributed +1.37 of the +2.84 weighted total, roughly half of all on-farm inflation — while a −4.2% fall in Fertiliser, Lime & Seeds (the largest single category at ~18% of expenditure) provided the only relief. Stripping interest out gives underlying on-farm inflation of +1.7%. Prices rose in every one of the 16 input categories except Fertiliser, Lime & Seeds (Insurance +8.7%, Animal Health +8.0%, Rates +5.7%, Electricity +4.9%, Administration +4.8%, Fuel +4.5% next-largest). North Island Hill Country (Farm Class 4) inflated slightly faster than the national average (3.1% vs 2.8%) owing to a higher interest share. The report also carries the full time series of annual per-category price changes (Appendix 3, from 2014-15) and the percentage allocation of farm expenditure by category (Appendix 4) — the escalation and expenditure-weight tables the NI food/livestock cost layer can use to de-date its cost cells to a common base year. This is the B+LNZ document whose lack of per-hectare dollar figures caused CR_044’s per-ha OPEX numbers to be dropped as unverifiable (RT_280) — this ingest confirms it is a price index only, leaving OT_091 the correct $/ha OPEX anchor.
Key claims
- claim: "On-farm inflation (the annual change in prices paid for sheep and beef farm inputs) was +2.8% between March 2023 and March 2024, following a +16.3% increase the previous 12-month period. 'Prices increased in all 16 categories of inputs but one: Fertiliser, Lime, and Seeds (-4.2%). The largest increase was for Interest (+12.0%), which contributes substantially to the overall increase in on-farm inflation because it comprises 11.4 per cent of total farm expenditure.' Interest rates are a key driver: 'The 12% increase contributed half the total on-farm inflation of 2.8% in 2023-24.'"
source_location: "Summary, p.1; On-farm Inflation section, p.2 (lines: +2.8% following +16.3%; all 16 but Fert/Lime/Seeds -4.2%; Interest +12.0% / 11.4% weight)"
- claim: "Underlying on-farm inflation — the change in farm input prices when Interest is excluded — was +1.7% in the year to March 2024, held down by the -4.2% fall in Fertiliser, Lime & Seeds. Interest is separated because it is a finance cost, not an input price in the ordinary sense: approximately 75 per cent of sheep and beef farm term liabilities are subject to floating interest rates and 25 per cent fixed."
source_location: "Underlying On-farm Inflation section, p.8; Summary, p.1; Appendix 3, p.13 (Underlying row +1.7); Interest sub-section, p.4 (75% floating / 25% fixed). ⚠ Table 2 (p.8) is internally inconsistent on this figure — its underlying column shows +4.4% / index 1,919 for 2023-24, contradicting the +1.7% headline; +1.7% is retained, see the Notes discrepancy caveat."
- claim: "Cumulative on-farm inflation: prices for sheep and beef farm inputs increased +30.8% over the last five years and +35.9% over the last 10 years. Underlying on-farm inflation (excluding interest) rose +28.5% over five years and +37.0% over ten years — 'moderately higher than consumer price inflation over the same period at 30.4 per cent.' Three-year cumulative (2021-22 to 2023-24) was +31.8% on-farm / +24.6% underlying ('In the three seasons from 2021-22 to 2023-24 prices rose by 32%')."
source_location: "On-farm Inflation section, p.2 (30.8% / 35.9%); Underlying section, p.8 (37.0% decade); Table 2, p.8 (10yr +35.9/+37.0; 5yr +30.8/+28.5; 3yr +31.8/+24.6; 2yr +19.6/+12.5); Summary, p.1 (32% over three seasons)"
- claim: "On-farm inflation was lower than consumer price inflation in 2023-24: on-farm +2.8% vs CPI +4.0% (March 2023 to March 2024). Over the last five years consumer price inflation was +23.4%, and over the last 10 years +30.4% (vs on-farm +30.8% / +35.9%). Appendix 3 gives the annual CPI comparator series (e.g. CPI +6.9% 2021-22, +6.7% 2022-23, +4.0% 2023-24)."
source_location: "On-farm Inflation section, p.2 (CPI 4.0% / 23.4% / 30.4%); Appendix 3, p.13 (Consumer Price Index (CPI) row)"
- claim: "Table 1 — Sheep and Beef Farm Input Price Changes, March 2023 to March 2024 (Percentage Change | 3-yr-average Expenditure Weight % | Weighted % Change): Wages +2.0 | 10.2 | +0.20; Animal Health +8.0 | 5.5 | +0.44; Weed & Pest Control +0.6 | 4.5 | +0.03; Shearing Expenses +2.2 | 5.2 | +0.11; Fertiliser, Lime & Seeds -4.2 | 18.0 | -0.76; Fuel +4.5 | 3.2 | +0.14; Electricity +4.9 | 0.8 | +0.04; Feed and Grazing +2.8 | 7.3 | +0.20; Repairs, Maintenance & Vehicles +2.3 | 12.2 | +0.28; Cartage +2.9 | 1.7 | +0.05; Administration +4.8 | 3.4 | +0.16; Insurance +8.7 | 2.3 | +0.20; Rates +5.7 | 3.1 | +0.18; Interest +12.0 | 11.4 | +1.37; Rent +0.9 | 3.5 | +0.03; Depreciation +2.2 | 7.7 | +0.17. TOTAL weight 100.0, weighted change +2.84. (Weights are the average three-year pattern of expenditure 2020-21 to 2022-23p; GST excluded.)"
source_location: "Table 1: Sheep and Beef Farm Input Price Changes, p.7"
- claim: "Percentage allocation of Sheep & Beef farm expenditure, 2023-24 (June year, Appendix 4): Wages 10.2; Animal Health 5.5; Weed & Pest Control 4.5; Shearing Expenses 5.2; Fertiliser, Lime & Seeds 18.0; Fuel 3.2; Electricity 0.8; Feed & Grazing 7.3; Repairs, Maintenance & Vehicles 12.2; Cartage 1.7; Administration 3.4 (Sub-Total Working Expenses 72.0); Insurance 2.3; Rates 3.1; Interest 11.4; Rent 3.5 (Sub-Total Standing Charges 20.3; Total Cash Expenditure 92.3); Depreciation 7.7 (Total Farm Expenditure 100.0). Fertiliser, Lime & Seeds is the largest single category (~18% of expenditure, averaged 2020-21 to 2023-24); the three biggest — Fertiliser+Lime+Seeds, R&M & Vehicles, and Interest — together are ~42% of total farm expenditure (their combined prices rose only +0.9%)."
source_location: "Appendix 4: Percentage allocation of Sheep and Beef Farm Expenditure, p.14; Major items of expenditure, p.5 (~42%, +0.9% combined; fertiliser ~18.0%)"
- claim: "Farm-class variation: 'North Island Hill Country farms (Farm Class 4) had a slightly higher inflation rate, at 3.1 per cent, than the New Zealand average of 2.8 per cent. This is due in part to a slightly higher proportion of total farm expenditure on interest.' An individual farm's experienced inflation depends on its own expenditure weightings and capital structure — higher-debt businesses felt the +12.0% Interest rise more."
source_location: "Annual changes in farm input prices, pp.5-6"
- claim: "Appendix 3 — annual percentage changes in sheep and beef farm input prices (March-quarter, 2014-15 to 2023-24) — records the historic volatility of individual input lines that the model can escalate on: Fuel +54.3% in 2021-22 (then +0.9%, +4.5%); Interest +86.5% in 2022-23 (then +12.0%); Fertiliser, Lime & Seeds +23.0% in 2021-22 and +14.0% in 2022-23 (then -4.2%); Feed & Grazing +14.8% in 2022-23. Headline On-Farm Inflation (incl. Interest) by year: +10.2% (2021-22), +16.3% (2022-23), +2.8% (2023-24); Underlying (excl. Interest): +10.7%, +7.8%, +1.7%."
source_location: "Appendix 3: Annual percentage changes in Sheep and Beef Farm Input Prices, p.13"
- claim: "Methodology: the report indicates annual changes in farm INPUT PRICES, not annual changes in total farm expenditure (which also depends on the volume of inputs used). Price changes for each category are weighted by that category's share of total farm expenditure (a three-year moving average) to derive the overall rate. It relies heavily on Statistics New Zealand's Farm Expenses Price Index (FEPI), March-quarter Business Price Indexes; GST is excluded; interest is calculated independently (overdraft + mortgage + fixed-term, weighted from the B+LNZ Sheep and Beef Farm Survey) and depreciation is included to price capital replacement. Index base 2004-05 = 1000. Published annually after Stats NZ releases the Business Price Indices in mid-May."
source_location: "Methodology and sources, p.9; Table 2 note (Index 2004-05 = 1000), p.8; About this report, cover p."
- claim: "Profitability context (a B+LNZ forecast, not an index figure): 'B+LNZ is forecasting that sheep and beef incomes will be 54 percent lower this year and most farmers will not make a profit this year.' The report frames persistent high input-price levels — even as the rate of increase slows — as an ongoing pressure on farm profitability and cashflow ('while the rate of price increases has slowed... significant inflation over recent years and high price levels continue to pose financial challenges')."
source_location: "Summary for 2023-24, p.1"Neobiome Intelligence relevance
This is a farm-input price-escalation index — the food/livestock analogue to OT_113/RT_368’s civil-cost escalation factor. Its value to the ④f food/livestock cost layer is as a de-dating multiplier, not a cost cell (it carries percentages, never dollars):
- De-dating the food cost cells to a common model base year (D02, ④f). The NI food/livestock cost inputs sit at mixed vintages — OT_091 per-ha OPEX is 2023-24, OT_082 is 2020, CR_044 poultry costs are various. This source supplies the annual and component escalation series to bring them to one base year: use the underlying (excl-interest) rate (+1.7% in 2023-24; +37.0% / 10 yr; +28.5% / 5 yr) for a debt-free self-sufficient community whose OPEX carries no mortgage, or the per-line rates (fertiliser, R&M, fuel, animal health — Table 1 / Appendix 3) for line-specific escalation. Interest is the biggest driver of the headline number (+12.0%, half of +2.8%) precisely because most farms are geared — so the headline +2.8% overstates the escalation a debt-free community faces; the +1.7% underlying rate is the defensible one for the model.
- Cross-check on OT_091’s per-ha cost composition (④f). The Appendix 4 expenditure weights — Fertiliser, Lime & Seeds ~18.0%, R&M & Vehicles ~12.2%, Interest ~11.4%, Wages ~10.2%, Depreciation ~7.7%, Feed & Grazing ~7.3% — independently corroborate the shape of OT_091’s per-hectare P&L (fertiliser and R&M the largest recurring operating inputs; interest a large but finance-only line to be stripped for a debt-free community). It confirms the OT_091 boundary caveat quantitatively.
- General NZ input-cost volatility signal (D01/D02 sensitivity). Appendix 3’s per-line history (Fuel +54.3% in 2021-22, Interest +86.5% in 2022-23, Fertiliser +23.0% then +14.0% then −4.2%) is a concrete NZ record of how sharply the recurring input costs an off-grid community carries (fuel, fertiliser, finance) can swing — useful context for OPEX sensitivity/robustness framing, even though the index itself never enters a $ cell.
- Provenance closure for RT_280 / CR_044. The RT_280 note records that CR_044’s per-ha OPEX figures (
50.99 /65.21/ha) and stock prices were dropped as unverifiable, “traced to a B+LNZ inflation report lacking them.” This ingest confirms that report is a price index with no per-hectare dollar figures — so those numbers were correctly dropped, and OT_091 (the per-ha $ P&L survey) remains the correct OPEX anchor. This source does not re-open or resolve the OT_091 half of RT_280.
Scope caveat: an index of average sheep-and-beef farm input-price changes, national-average (N.I. Hill Country Class 4 ran slightly hotter at 3.1%), whole-farm-P&L weighted. It escalates costs; it does not supply them. context: ni — the calibration value is the escalation series + expenditure weights.
Research targets
Research gaps
- RT_370 (low priority) — a common-base-year escalation pass for the ④f food/livestock cost cells: apply this B+LNZ on-farm-inflation series (underlying excl-interest rate for a debt-free community, or per-line rates) to de-date OT_091 (2023-24), OT_082 (2020) and CR_044 (various) to one model base year, so the food-economics lines are vintage-consistent. The D02/food analogue to RT_368 (civil-cost escalation for OT_113). → D02
Related (not resolved by this source)
- RT_280 (pasture-grazing / poultry cost cells) — this source does not contribute the per-ha OPEX (it has no dollar figures); OT_091 holds that anchor. This ingest only closes the provenance question of which “B+LNZ inflation report” CR_044’s dropped figures came from.
Notes
Authoritative primary from Beef + Lamb New Zealand (P24002, June 2024), downloaded from beeflambnz.com (not AI-prepared), read verbatim via pdftotext -layout. Every cited figure traces to a specific page/table (Summary p.1, On-farm Inflation p.2, Table 1 p.7, Table 2 p.8, Methodology p.9, Appendix 3 p.13, Appendix 4 p.14).
data_quality: high — a single authoritative primary (B+LNZ Economic Service, built on Stats NZ FEPI), NZ-specific, read verbatim, but not independently triangulated against a second source — matching how the two sibling B+LNZ primaries OT_091 and OT_082 are classified (model_design.md §2: the verified↔high line is independent corroboration). The report is internally consistent on recomputation (Table 1 Σ Col.1×Col.2/100 = +2.84 → +2.8 headline; Table 1 rates match the Appendix 3 2023-24 column).
⚠ Index, not a cost cell. The whole document is percentages — it contains no dollar values. It is a de-dating/escalation reference; it must never be entered as a $ figure. It is whole-farm-P&L weighted (interest, rent, depreciation included) — use the underlying excl-interest series for a debt-free self-sufficient community.
⚠ Source-internal discrepancy on the 2023-24 underlying rate (verified against the raw). The headline underlying (excl-interest) rate is +1.7%, stated in three independent places — the Summary (p.1), the narrative (“underlying on-farm inflation was 1.7 per cent in the year to March 2024”, p.8) and Appendix 3 (p.13, the Underlying On-Farm Inflation row = +1.7). But Table 2 (p.8) carries +4.4% in its underlying-inflation percentage-change column for 2023-24, matching that table’s own underlying index of 1,919 against the prior year’s 1,838 (1,919 ÷ 1,838 = +4.4%; a genuine +1.7% rise would put the index at ~1,869). So Table 2’s underlying figure (+4.4% / 1,919) is internally consistent with itself but contradicts the rest of the document — it appears to be an error in the report. +1.7% is retained as the headline underlying rate (three sources vs one) and is the figure any D02 ④f escalation cell should carry; the +4.4% is recorded here so that escalation cell is treated as approximate, not exact. The headline on-farm rate incl. interest (+2.8% / index 1,778 vs prior 1,729) is not affected by this discrepancy.
⚠ Distinct from the two sibling B+LNZ sources: OT_091 is the per-ha farm-class P&L (dollar OPEX/GFR/EBITRm), OT_082 is the hill-country stocking-rate factsheet. This is the annual input-price inflation index (P24002) — no page/figure overlap.
Connections
Links to
Referenced by
EDT domains (1): D02: Smart Food Systems & Agriculture