There are many cost and market based values to choose from when valuing livestock. The “National Average Market Value” (Herd Scheme) is a method where increases and decreases are non-taxable where numbers remain constant. The “Market Value” basis is a taxable scheme where your stock are valued at a fair market value. Another taxable scheme is the “National Standard Cost” where your existing and purchased stock dictate the closing value of your herd.
Dairy Cattle
Dairy livestock at the end of the 2010 financial year were tending to increase in value. A mixed age Friesian cow valued under the National Average Market Value, or Herd Scheme Method, was $1,378 per head.
In the 2011 financial year the expectation is that this could increase substantially by $500-$1,000 per head over and above the 2010 values. The Inland Revenue Department undertake a nation-wide valuation in April each year. They release the Herd Scheme values in late May of the same year.
This is an important period where it is of great benefit to be on the Herd Scheme. As mentioned the Herd Scheme method is a non-taxable valuation method where the number of livestock remains constant.
Therefore, any current year increases would see non-taxable gains in the value of dairy cattle valued under the Herd Scheme method.
Sheep
Since 2007 the value of a two tooth ewe has gone from $75 per head to $122 in 2010. As with beef, non-taxable increases in values can be obtained if livestock were valued under the Herd Scheme.
Beef
Beef values have increased over the last few seasons with there being benefits to value livestock under the Herd Scheme method.
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