Demand for sheepmeat and beef will recover slightly, but not enough to cover continuing increases in farming costs, according to Beef + Lamb New Zealand’s new season outlook. BLNZ chief economist Andrew Burtt reckons it’s going to be another tough year for farmers with farmgate prices expected to be similar to last season but increasing costs, driven by inflation and high interest rates, continuing to squeeze farm profitability. BLNZ is forecasting farm profitability to fall by 31% for the 2023-24 year following a decline of 32% in 2022-23. That means profits for farmers have more than halved in two years which is a 15-year low taking inflation into account. Demand in key markets is also likely to be soft as economies remain weak and China’s economic recovery remains uncertain. Competition from Australia could add to the pressure.