The news that the national sheep flock had fallen in numbers has come as no surprise. It is still disappointing to see an industry and animal that has done so much for New Zealand being whittled away.
Last year the drought in Hawkes Bay was given as the reason that region lead the reduction in numbers. This year the reasons given are more complex and perhaps longer lasting.
As with last year, hogget numbers took the greatest hit with the largest reductions being seen in Northland, the Waikato and the Bay of Plenty (-6.7%) and Southland (-7%). However, unlike last year ewe numbers had a drop this year as well.
Overall, the latest drop is -0.76% considerably less than the -2.96% experienced last year. A look at a similar report I did last year could almost be a ‘cut and paste’ job for this year. With just the actual numbers needing a bit of modification.
The high fall in hogget numbers last year meant that a fall in adult ewe numbers this year was predictable. The worrying thing for the industry is that hoggets have continued to fall so the longer-term outlook does not look healthy.
Looking at the graph below shows that since 2000 the total number of sheep in New Zealand has declined by nearly -40%, from 42.3 million to 25.8 million along with that the number of beef cattle has decreased by -5%, from 4.2 million to 4.0 million with breeding cow numbers dropping by -0.9% in the last season.
Three or four different factors have contributed to the demise of the sheep flock.
The first being the climate. The maps below show the difficulty farmers have had the last couple of seasons. While the 2020-21 was better than the previous it still was not an easy year, particularly in the traditional sheep farming regions.
Climate is likely to become more uncertain and troublesome in the future although there is some contradictory advice. However, regardless which way it goes, flexibility will be a key factor to farm survival.
The second factor is switch to more economically efficient livestock systems. In livestock terms the winners have been in dairy beef with beef numbers showing an increase of +2.5% while at the same time beef breeding cow numbers dropped -0.9%.
The increase came mainly in the 2yr+ bracket and the B&LNZ belief is that not only are sheep being replaced by finishing cattle, but female dairy grazing mobs are also.
Finishing cattle, especially bull beef is a more flexible mob to carry at any time and in particular in times of climatic variability. And that is unlikely to change into the future.
They also have less GHG baggage to worry about with the dairy farmer having to carry the cost of the dam. As always, the increasing age of sheep farmers in particular means that the more labour-intensive sheep start looking less attractive. The lack of a viable price for wool is contributing to the lower returns from sheep and this also is unlikely to change in the future.
The third area pushing sheep decline is the shift of pastoral land into forestry.
The B&L CEO Sam McIvor is reported saying that government should place limits on how much pastoral land should be allowed to go into forestry. He quoted a B&LNZ commissioned report by BakerAg’s that said 3,965 ha of whole sheep and beef farms were sold into forestry in 2017, increasing to 20,227 ha in 2018 and 36,824 ha in 2019. The irony of this is that elsewhere in the developing world huge tracts of land are going from rain forest into cattle ranching and palm oil production among other uses.
The Paris Agreement on Climate Change which the Government signed up to also specifically (Article 2) said that food production should not be sacrificed in order to meet climate needs.
Damian O’Connor said he was advised by officials that the amount of land planted between 2017 and 2020 was 87,200 ha, which is 37% lower than the BakerAg report. His view is reinforced by the Forest Owners Association (FOA) who have also questioned the accuracy of the BakerAg report and use the figures that the plantation forest estate has shrunk by 162,000 hectares in the past 18 years, and mostly to dairy farms. (This happened back in pre 2001 when there was a rush to clear land to beat government regulations which would have made those clearing land liable for their emissions and again when the price of carbon was driven artificially low post the 2008 GFC by the then government policies).
Whether it is sound practice to use data from 12-20 years ago to support what is happening today is debateable. Before the last election O’Connor indicated that if annual land to forestry went above 40,000 ha’s per year he would look at bringing in restrictions. However, he did not make any promises. Most farmers would point out that it is not only what the conversions are doing to land use but perhaps more importantly what it is doing to rural communities.
How long it takes before the New Zealand sheep industry starts to lose its efficiencies of scale is unknown, and technology may play an important role in staving off the day when sheep farming does reach its sunset.