Guy Trafford tracks the decline in the national sheep flock, noting it is getting down to the minimum level where New Zealand can be an efficient sheepmeat producer

Guy Trafford tracks the decline in the national sheep flock, noting it is getting down to the minimum level where New Zealand can be an efficient sheepmeat producer

The results of the 2020 livestock survey were published recently by Beef and Lamb NZ (B&LNZ). Not surprisingly sheep numbers were down.

Some years ago I was contacted by a Southland newspaper to comment on falling sheep numbers in New Zealand which had then just fallen to 28 million. I made the comment that if we get to 25 million then the New Zealand sheep industry was going to have problems.

My feeling was that at that number New Zealand was going to lose some of the competitive advantage it has built up over many other nations through our efficiencies in areas such as transport, processing and farm servicing. That is, we would see a thinning down of livestock carrier companies, closing of stock and station stores in the rural centres, and of course, meat processing companies closing - all things that help farms operate at optimal performance.

This would lead to lower net returns flowing back to sheep farmers, which would then create even more losses in both farms and sheep numbers.

The latest numbers show the sheep flock at 26.2 million sheep down 2.3%. With prices for last season at record levels (up until the arrival of COVID-19) on the surface this might sound surprising. However, many on the east coast of both Islands’ will not be surprised.

First was the widespread drought, worse on the North Island east coast but the South Island also experienced its fair share of discomfit. This was compounded for all farmers by the lockdown of the sale yards throughout most of the country.

The good news is that the breeding ewe numbers actually went up by 0.1% and it was the hogget flock (under 12 months of age) that took the hit dropping 8.1%. The reason hogget numbers fell was presumably for exactly the same reason we got rid of our ewe lambs when the sale yards (finally) opened. By May the ewes are getting close to profit ( i.e. lambing) and there was more demand from both lamb finishers and the works for hoggets’ (or lambs as they still were then) as there had been an early and large kill of any male lambs due to the drought and cashing in on the high prices and there was a waiting list as long as your arm for ewes to go.

So many farmers, overstocked for the time of year and with a winter beginning, had to get rid of the easiest class to sell and ones that were not going to hurt cashflow in the short term (in fact they even may have improved it). 

Unfortunately, with a lack of young replacement stock in the system it is unlikely that sheep numbers will be making a bounce back for a year or two and we see a further fall next year as older ewes that may have been held onto this season (hence the small rise), go out at a greater rate than ewe hoggets’ coming in.

Due to feed stress (and probably the absence of mated ewe hoggets’) B&LNZ are predicting this season’s lamb numbers are going to fall by nearly one million lambs, or 4.2%. Scanning results that have come in have shown a reduction of between 5% to 10% of the inlamb rate of ewes. So we're not at the 25 million mark yet but getting uncomfortably close. The 70 million at New Zealand’s peak numbers in the 1970s is starting to seem a very long time ago.

A quick look at the NIWA soil moisture maps of March and June clearly shows the problem farmers were facing. Unfortunately, as the June map shows this year is heading towards yet another dry summer with this June being considerably drier than 2019 at the same time. The three progressive maps (historical, last year and 2020) show how each map has got steadily more dry.

Australia has had a similar reduction (in percentage terms) to its sheep flock. It also had its high in the 1970’s getting up to 180 million sheep. This year it dropped by -9% or seven million sheep to 63.7 million sheep. This is the lowest sheep numbers there have been in Australia since 1903 (the year of the devastating Federation Drought). At 100% lambing this is 8 million less lambs going onto the international market. So, it should have a positive influence on farmers returns all else ignored.

Australia’s drop in numbers is also largely driven by the climate with many farmers having faced crippling drought. Rains have since come but too late for many sheep flocks.

Interestingly, perhaps, new data shows just 63,000 tonnes of wool came out of the nation's shearing sheds in the three months to the end of June, the smallest quarterly clip on record. Thirty years ago, the nation produced 280,000 tonnes for the same quarter. So at least the New Zealand merino clip should see some positive improvements when things settle down somewhat.

The picture for cattle is similar to sheep although total beef cattle numbers are up, be it slightly +0.1%, but breeding cow numbers are down, -6.7%. The decline of the beef cow herd shows the ever-increasing reliance on the dairy industry for finishing stock.

One benefit of the decline in sheep and breeding cow numbers will be a decline in GHG emissions. This will be further compounded by the lighter weights of the animals as GHG emissions are a factor of energy-in-equals-methane-and-N2O-out and in a drought, there is obviously a severe reduction in the supply of energy.

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19 Comments

Interesting.

But. It isn't clear which nation (Australia or NZ?) Guy is talking about when he says " 63,000 tonnes of wool came out of the nation's shearing sheds in the three months to the end of June." Can anyone clear that up?

One thing that surprised me from those soil moisture maps, but not the gist of the article, is how dry Manawatu soils are, even if at histroic norms they are not expected to be at field capacity in June. Why is that? Not behind a rain shadow? Or do the Tararuas form a rain shadow for rains from the south?

Rain from SW frontal systems are probably blown back out of the ground by the following (strong) NW winds that often follow?

Quite right and sorry. It was Australia although the decline could have at a similar ratio in NZ.

NZ's stock numbers have been declining steadily since 1980 - 1984 by about 24%, and, as Guy says, methane emissions have been tracking this decline. Why then are pastoral farmers expected to further reduce emissions on a farm by farm basis?

Because we Know Best.....

I wouldn't be worried about emissions - I would be worried about rain, value of wool, value of pelts etc etc.
Will the wool price rise again to a profitable level after costs? Will other animal by products increase in value again?
Is this drying sequence a cycle or is it signs of a warming climate as forecasted?
If this weather trend continues its a serious issue that will require some large changes. I would start planning for different scenarios now and how we can remain profitable in different outcomes.

I remember docking with a local farmer when I was on my school holidays. Pretty poor lambing %85, I heard him say, " well as long as my wool cheque is bigger than my lamb cheque I will be okay". I went on farm discussion trips where farmers talked about the wool cycle and it was due to come back around, that was in the early 80's. Wool is in long term decline, China controls the processing and is the main buyer. I do not hold any hope for wool, if it comes back around that would be nice but don't hold your breath.

My ground is so hard, it shakes you on the bike, we are so far behind on rainfall ,i never would have thought it possible. The link I put up below is the October forecast and it's weak La Nina. So drier than normal out till November /December. We normally pick up a few thunderstorms but not lately. The weather is going to be a really big deal if this keeps up.

NZ lamb, is a very good product and especially chilled. The industry since the 80’s (recall Tesco’s stating would be better off selling gateaux) has enhanced quality greatly and developed extended shelf life. But despite that the markets are falling away by volume. If they weren’t processing would be increasing capacity not reducing it. As this column accurately depicts the economies of scale for the industry started to spiral downwards some time ago and that is hardly decelerating. The industry had its roots in the domination of the British overlords, Vestey, Borthwicks, Dalgety, Swift, CWS et al. They all made hay while the sun shone, not necessarily good but safe enough protein for the hoi polloi. Thus the sad truth is that for as good as the product may now be, the only interest in the market has been by those who can still make money out of it. To put it sardonically, if tomorrow NZ had a bio catastrophe, no exports, the world would soon not really notice.

It wouldn't take me long to ring a few friends and get to 3000 breeding cows killed in this years drought. Capital stock numbers have been decimated around here. Where is the stock going to come from? This is a big deal for all of us.

I’m always concerned when I see loads of capital stock killed. I’ve seen a number of farmers over the years get rid of their breeding stock as they see better returns from finishing, but they tend to lose control of their operation going from excellent returns one year to losing money the next. Every cow or ewe killed is another calf or lamb which is fought over for at the saleyards with diminishing returns. I know you are referring to getting rid of capital stock due to drought but it’s imperative that traditional farms do their upmost to retain breeding animals.

How's that reliance on the dairy industry going to play out with few calves being treated this year?

has anyone done numbers? I am hearing massive drops in powder sales, those rearing cannot get contracts so doing a lot less. If one calf supplier around here is back 10,000 calves, this has the potential to be a really really big deal.

Everything I've heard is has been devoid of actual figures. Would be good to know.
Re the scary rainless weather. I'm experiencing the best spring I've ever known. I'm not sure when it will end but we're currently riding it for all we're worth. Just enough rain, good soil temp, pastures looking absolutely prime, cows munching everything.

It's been an absolute pleasure farming this winter and early spring. Dryish ground, warm temperatures, amazing pasture utilisation and happy cows and calves. Expect to pay later though.

"Expect to pay later though" typical bloody farmer.
I keep hearing that but I'm ignoring it, it's going to continue to be great. Greater than trump great even.

Me too, I am growing beef, animals in great health.

Cant the govt just print some money to solve it Simple really

Unless my old lyin' eyes deceive me, Guy, that there stock shot (groan) accompanying the article is of a slope well in excess of 10° so those there Sheeps will, under the new rules, surely be Banned from 'em?