ANZ Agri Insights: EBITR and ROA Across
New Zealand's Five Key Farming Sectors
ANZ Bank's agri insights team analysed the financial performance of more than 4,000 NZ farming customers across dairy, kiwifruit, red meat, arable, and pipfruit over a decade (2015–2024). The report compares two five-year periods, pre-COVID (2015–2019) and post-COVID (2020–2024), to reveal which sectors are thriving, which are under pressure, and what the top performers do differently.
About the analysis
ANZ Bank analysed financial data from more than 4,000 ANZ agricultural customers across New Zealand's five major farming sectors. The key performance metric is EBITR, Earnings Before Interest, Tax, and Rent (gross farm revenue less farm expenditure, depreciation, and drawings). Return on Assets (ROA) is expressed as EBITR divided by total asset value.
Top performers are defined as farms operating in the top 25% by EBITR for their sector. The two comparison periods are 2015–2019 (pre-COVID) and 2020–2024 (post-COVID).
Sector performance summary: EBITR change 2020–2024 vs 2015–2019
| Sector | Peak EBITR/ha | Median EBITR change | Top quartile EBITR change | Cost increase | Status |
|---|---|---|---|---|---|
| 🥝 Kiwifruit | $42,000/ha | +$15,000/ha (+74%) | +$29,000/ha (+83%) | +49% farm working expenses, highest of all sectors | Strong |
| 🐄 Dairy | $2,617/ha | +$927/ha (+77%) | +$1,289/ha (+68%) | +31% farm working expenses | Strong |
| 🌾 Arable | $1,207/ha | +$312/ha (+43%) | +$435/ha (+38%) | +27% farm working expenses | Growing |
| 🐑 Red Meat | $337/ha | -$7/ha (-2.7%) median | +$15/ha (+3%) top quartile | +16% farm working expenses, best cost discipline of all sectors | Challenged |
| 🍎 Pipfruit | $12,185/ha | Margin contraction, dual challenge of falling revenues and rising costs | Top quartile recovering through Asian market variety investment | +11% farm working expenses, lowest absolute increase, masking production decline | Recovering |
Return on Assets (ROA), the capital efficiency picture
Return on Assets across all five NZ farming sectors remained below what many investors would consider an adequate return for the risk and effort involved in farming. Over the 2015–2024 period, median ROA across the sectors averaged between 0% and 7%, with most sectors tracking well below the approximate 3% risk-free rate represented by the 10-year government bond rate over the same period.
Kiwifruit and dairy were the only sectors where median ROA came close to or approached the risk-free rate, and only in the stronger years of the 2020–2024 period. Red meat, arable, and pipfruit median operators consistently delivered ROA below this threshold.
Median ROA approached risk-free rate in best years. Top performers significantly above. Primary capital efficiency driver: production intensity per hectare and canopy management.
Strong EBITR growth +77% pushed ROA close to benchmark. Top performers achieved above risk-free rate in 2022–2024. Home-grown feed efficiency is the key lever.
Improved EBITR but capital intensity (machinery, irrigation) keeps ROA low for average operators. Top performers do better through precise agronomy and capital sequencing.
Both sectors face structural ROA challenges in the current period. Red meat had led all sectors pre-COVID (29% EBITR margin). Pipfruit recovering after climatic events.
Sector deep dives: what the data shows
Kiwifruit
StrongKiwifruit delivered the strongest absolute EBITR gains of any sector, the average operator improved earnings by $15,000/ha (+74%) while top performers added $29,000/ha (+83%). The primary driver is the Sungold variety, though the data shows innovation and precise crop management matter at least as much as variety selection: over 75% of the dataset grows Sungold as the dominant income source, yet only 59% grow it exclusively, with the balance achieving strong results through variety diversification and orchard system development.
Dairy
StrongDairy is the standout performer on an absolute dollar per hectare basis when factoring in scale. The average operator lifted EBITR by $927/ha (+77%) between the two five-year periods, while top performers delivered $1,289/ha (+68%), a larger absolute gain even as the percentage lift was slightly lower. Key operational gains supporting this include a 5% increase in milk per cow, a 5% decrease in somatic cell count, and a 2% increase in six-week in-calf rate, with even stronger gains in the top quartile.
Arable
GrowingArable farming showed notable improvement in the 2020–2024 period relative to pre-COVID years, with the median rising $312/ha (+43%) and top performers up $435/ha (+38%). However, these gains came at a cost: the 2022 fertiliser spike hit arable particularly hard, and increased capital deployment, in land, machinery, irrigation, and technology, was required to achieve the improved results. The arable sector's intensive operating model leaves limited ability to substitute or suspend expenditure when product prices fall.
Red Meat
ChallengedRed meat is the most challenging sector in the current period. The average operator has gone backwards, with earnings falling $7/ha (-2.7%), while even top performers managed only a modest $15/ha (+3%) gain. However, context matters: the pre-COVID period (2015–2019) saw red meat leading all sectors with an EBITR margin of 29% of income. The post-COVID normalisation of lamb prices, from over $160/head in late 2022 to $100/head in early 2024, was the primary earnings headwind. Red meat farmers have responded with disciplined cost management, reflected in the lowest cost increase of any sector (+16%).
Pipfruit
RecoveringPipfruit is the most challenged sector in the current analysis. The sector faces a dual headwind: falling revenues (fruit production fell over 17% between 2020 and 2023 following consecutive weather events, with 67% of NZ apples grown on the East Coast of the North Island) and rising costs. The cost increase of only 11% is misleading, it reflects reduced production activity rather than genuine cost control. Production has recovered to pre-2020 levels in 2024, which should support a margin recovery.
Three themes from the ANZ analysis
Revenue: Consistent production efficiency beats price chasing
Commodity prices are largely outside farmers' control, and they can swing as much as 23% in a single year. The top-performing farms across all sectors shared a focus on production volume, timing, and animal or crop efficiency rather than attempting to predict or benefit from price movements alone. The kiwifruit sector illustrates this perfectly: Sungold pricing averaged a 24% increase between periods, yet kiwifruit income grew 54%, demonstrating that efficient production gains matter more than price alone.
Costs: Timing and efficiency matter more than spending less
A narrow focus on cost reduction does not drive better financial outcomes. High-performing businesses sequence input costs with production and price, spending more when conditions support it, pulling back on discretionary spend when they don't. Red meat farmers exemplify this approach: their ability to spread annual input costs across an 18-month time frame allows them to match fertiliser, stock, and maintenance spending with income cycles in a way that intensive systems cannot.
Profit: Cash performance drives the investment cycle
The sectors and operators generating the strongest cash earnings (EBITR) are the same ones investing in the technology, genetics, and capital that will drive the next cycle of improvement. This creates a compounding performance gap: dairy and kiwifruit top performers generate the cash to invest in genetics, irrigation, and systems improvements, which in turn drives further production efficiency. Average performers, by contrast, may be generating enough to cover drawings and debt service, but not enough to invest in the next step change.
Income efficiency: EBITR as % of Total Farm Income
For each dollar earned, how much drops to the EBITR line
| Sector | 2015–2019 | 2020–2024 | Trend |
|---|---|---|---|
| 🥝 Kiwifruit | Highest among sectors | Improved further | ↑ Improved |
| 🐄 Dairy | Strong | Improved | ↑ Improved |
| 🌾 Arable | Moderate | Modest improvement | → Stable/modest gain |
| 🐑 Red Meat | 29%, sector leader | Declined, margin squeezed | ↓ Declined |
| 🍎 Pipfruit | Strong | Contracted, climatic impact | ↓ Declined |
Key takeaways for NZ agricultural exporters
- 1Kiwifruit and dairy are the two sectors delivering returns closest to the risk-free rate, and they share a common driver: maximising production efficiency per unit of input rather than chasing commodity prices.
- 2The performance gap between the top 25% and the average is significant in every sector. In red meat, top performers earn 80% more EBITR/ha than the average, representing a major opportunity for operational benchmarking.
- 3Cost inflation of 27% (general farm average) since 2019 means cost control is not optional. But the most successful operators don't simply cut costs, they sequence expenditure to match production cycles and price conditions.
- 4Pipfruit is recovering from the structural damage of consecutive cyclone events. Growers investing in Asian market varieties and downstream integration (cool storage, packing) are leading the recovery.
- 5Red meat's pre-COVID performance (29% EBITR margin, sector-leading) demonstrates that current headwinds are cyclical rather than structural. The discipline shown in cost management through the downturn positions the sector well for recovery as lamb prices normalise.
Why export payment security matters for NZ agri exporters
With most NZ agricultural sectors exporting the majority of their production, kiwifruit at over 95% export-oriented, dairy at over 90%, protecting the payment on every export transaction is directly linked to the EBITR and ROA outcomes this report covers. A single unpaid or delayed export transaction can materially impact a season's earnings.
Letters of Credit remain the most secure payment instrument for agricultural exports, particularly to buyers in emerging or unfamiliar markets. Ensuring LC documents are compliant before presentation is the final step in protecting the earnings that seasons of careful farming have generated.
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Analysis based on ANZ Bank New Zealand's Agri Insights report: "Part One, Building a Profitable Farming Business", covering 4,000+ ANZ agricultural customers from 2015–2024. DocSure AI outputs do not constitute financial or investment advice.