New Zealand sheep and cattle sectors set for growth

Even though recent figures from New Zealand show that sheep numbers continue to decline, Mike Petersen, special agricultural trade envoy, from New Zealand, says that they may have reached a plateau.

A downward trend in hogget and breeding ewe numbers has seen New Zealand’s national sheep flock shrink by 3.2% in the past 12 months, to currently stand at 29.8m head. The largest contributor to the overall decline was the continued change in land use towards dairy on the south island. Drought was another cause.

Dairy cattle numbers increased by 0.7% to 6.53m head, with 5.09m of this consisting of cows. The south island now has 40% of the New Zealand dairy herd, an increase of 26% over the past decade.

Petersen believes that New Zealand’s ability to convert more land to dairy is now limited due to environmental constraints, such as nutrient regulations and water quality, along with the increasing urban vote. He says that this may help the sheep and cattle sectors grow in the future.

Already, beef cattle are up 1.6%. This is mainly on the back of carrying over older cattle. The national beef herd now stands at 3.76m head.

While the EU accounted for 49% of total New Zealand lamb exports, volumes were down by 5.9%. China is the largest market for New Zealand lamb, followed by Britain.

Petersen sees the “fifth quarter” as key to improving returns for sheep and beef farmers. He notes that in the past, New Zealand sold lamb flanks for NZ$1.50/kg (€0.93c/kg), but now thanks to access to the Chinese market, they sell for NZ$6/kg (€3.72/kg). By selling co-products such as heads, feet and offals to these markets, between 85% and 92% of a carcase is now saleable, compared with 66% in the past.

With 80% of beef exported, high prices for manufacturing beef in the US, coupled with a favourable exchange rate, have driven beef prices to levels equivalent of €3.60/kg. US drought has been a key driver.