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Sheep milking is getting a resurgence after an extended rocky start, and SOE Pāmu is one of those benefiting - helped by a wide program of 'public investment' in the sector

Rural News / analysis
Sheep milking is getting a resurgence after an extended rocky start, and SOE Pāmu is one of those benefiting - helped by a wide program of 'public investment' in the sector
milking sheep

While I’ve never been a philosophical fan of Pāmu (LandCorp) it was refreshing to see them coming out with a meaningful half-year profit. At $41 million it is a considerable leap up from the $8 million which came out at the same time last year.

The annual NPAT forecast has now been lifted from $73 million, which was aimed to provide a 2.5% return on equity to $88 million. A 20% increase which will lift the return on equity to around 3%, something that is starting to be competitive.

While not highlighting the fact, it will be interesting to see when the full year returns come out post June 2022 how much of an impact carbon prices are having on the bottom line. Pāmu have been at pains to point out that they are first and foremost livestock farmers and trees are only planted on land not suitable for other forms of ‘farming’. Given they are planning on planting between 1,000 -2,000 ha annually over the next decade it will still be a significant financial contribution.

One of the other enterprises which appears to be turning up trumps is their joint enterprise with SLC into sheep dairying (Spring Dairy). The government seems attracted to this burgeoning industry with several years ago providing seeding funding of the tune of $13 million to Pāmu to aid the establishment of the industry they are now providing the Central North Island Māori Agribusiness Sheep Milk Collective with $700,000 of financial assistance. If successful they will follow the path of Maui Milk a company 60/40 joint venture between a Chinese investment and marketing company, Super Organic Milk Co. and Māori trust, Waituhi Kuratau Trust.

According to a statement released by Minister for Agriculture Damien O’Connor “The investment is part of the Government’s Fit for a Better World roadmap, which aims for food and fibre sector exports to earn an extra $44 billion over 10 years,” The Government is also supporting wider industry research to capitalise on growing demand for sheep milk. “MPI is funding a $12.56 million six-year project with the aim of building a high-value and sustainable sheep dairy industry in Aotearoa New Zealand,” Damien O’Connor said.

Timing is everything in business and it seems a shame that Blue River in Southland couldn’t have received more support when it was needed some years back. With a flock of around 18,000 milking ewes they were sheep dairying New Zealand. Caught up in (perhaps with other issues) the fall out of the clamping down on infant formula exports into China after the Fonterra botulism scare (which did prove to be a false alarm, if not handled poorly) they never recovered and now it is largely an industry that was, at least in Southland. While the Blue River brand still advertises infant sheep milk powder for sale it is believed to be made from largely imported powder and capitalises on the New Zealand’s positive reputation. Quite legal but something New Zealand Commerce Commission needs to rectify. There is some hope in Canterbury with Sheep Milk NZ getting established and a number of farms committing to supply. Perhaps some government assistance could also be useful here.

Moving back to carbon farming, it will be interesting to see just what the government response is and how fast it takes to happen in regard to what seems to be the growing number of conversions of farms to carbon farming. While farmers have been complaining for at least two years and not getting a lot of traction when it becomes the feature of the Sunday programme it may make some politicians sit up. Unfortunately, when we have four Government Ministers involved (Minister Shaw for Climate Change, Minister Nash for Forestry Minister O’Connor for Agriculture and Minister Parker for the Environment) and no doubt with different views of the problem it is hard to see a quick resolution.

Also, I have doubts whether the Ministry for Agriculture will have the loudest voice at the table or whether he is even sympathetic to farmer concerns over this. One fact that was raised by the forestry industry representative is that plantation forestry creates more jobs than pastoral farming. I have always found this difficult to reconcile. The images of Tokomaru Bay, and we could include Ruatoria, Te Puia and Tolaga Bay here, all show sad evidence of the decline in population on the East Coast since the forestry replaced pasture. I agree not all of this can be put as the fault of forestry and the down turn had begun before the large-scale conversion of farms to plantations.

But what we can certainly see is that there has been no resurgence with the growth of plantation forestry (carbon farming would/will be infinitely worse). If the jobs are being created it certainly not lifting the population in the rural sector. Oddly enough I was born and bred at Matawai and spent several years ‘up the coast’ shepherding inland from Te Puia, Tokomaru Bay and Tolaga Bay. I went there for the large stations and quality of country. So, I do feel a strong connection to the region and empathise with the farmers and the community.

P2 Steer

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There is less plantation forestry today than there was 20 years ago. Changing land use from forest to farms means that the school-children of farmers are going to schools like Reporoa rather than Ruatoria. Loss of rural employment is because of mechanisation and efficiency, not forestry. Forestry allegedly employs more people per ha than farming according to some published reports.


Question of timing SimonP Farmers show up to the farm every day. Loggers show up every 25 years. Bit hard to keep the school running based on that ratio. Especially now pruning is in decline meaning silvy workers can't work year round with a winter planting glut not matched by pruning demand. Once the school is gone the community is finished. Otago, Southland, West Coast already have population densities similar to Lapland. How much more do we want to gut this places?

Especially when the whole transformation is based on computer model based hypothesis and there has been no increase in the rate of warming since the Little Ice Age…

"The global temperature departure from average in January fell from December to what is essentially zero, at +0.03 °C"





Your credibility goes out the window every time you try and suggest that anthropogenic global warming due to increasing greenhouse gas concentration is not happening.…



The rate of warming in your linked chart 1900 to 1940 is identical to 1980 to 2020.

CO2 increased 14 ppm 1900-1940 for the same rate of warming as 75 ppm increase 1980-2020. If anthro CO2 was the driver wouldn't we have seen an increased warming rate this century given the CO2  rate of increase was 5x higher?  Not just same old same old post Little Ice Age warming? You can see from the Met Service the chart the rate of warming has not increased also.

Then of course 1940 - 1980 28 ppm CO2 increase and resultant zero warming.

Gavin has a bit of work to do on his hypothesis. Let's put the trillions of carbon slush funds in to something more useful than pine trees on farmland while he figures it out.…

Global warming.

"The Antarctic continent has not warmed in the last seven decades, despite a monotonic increase in the atmospheric concentration of greenhouse gases."




no increase in the rate of warming since the Little Ice Age. Simply untrue.

The other quote which you have now repeated several times in just pathetic and you must know it. The warming rate is not and never has been linear. Otherwise every year would inevitably be warmer than the previous year and of course that does not happen. natural events like El Nino and la Nina can and do influence the global temperature negatively and positively and you know this, but it clearly doesn't suit your world view.

I have sent you numerous links to such as Berkeley Earth and could send many more, but you will be glad to know that from now on, I will leave you in peace to keep denying the reality that to most others is becoming all too evident.

However, I cannot leave without one last parting shot. In a 10,000 word essay i wrote; Climate change-A Synopsis- I finished with a couple of quotes. The first was from the US National Intelligence Council which acts as the co-ordinating body of the sixteen intelligence services. In a briefing document in 2010, they said this; "Climate change will act as an accelerant of instability or conflict, placing a burden to respond on civilian institutions and militaries around the world).

The second quote came from a letter written to the Senate majority and minority leaders from 33 retired generals and admirals that; "Climate change is threatening America's security, it exacerbates existing problems by decreasing stability, increasing conflict and incubating the socioeconomic conditions that foster terrorist recruitment. The State Department, the National Intelligence Council and CIA al agree and are planning for future climate-based threats".



The intelligence services climate predictions have been stellar so far. Why is the rate of warming not increasing? How do explain the Met Service/BBC chart and pre-1940 warming? Pretty simple questions for a man of your talents.

About this intelligence service predictions -

"A secret report, suppressed by US defence chiefs and obtained by The Observer, warns that major European cities will be sunk beneath rising seas as Britain is plunged into a ‘Siberian’ climate by 2020. Nuclear conflict, mega-droughts, famine and widespread rioting will erupt across the world." And what do we get in 2020 but global greening and record crop production!



The dynamics of the rural work force has changed. Most travel everyday, and that includes shearers. Not many want to live far from towns as the cost of transporting children to sports etc is expensive and most house wives don't want to sit around the house all day, and I don't blame them.

The forestry work force is mainly centered in larger communities, tuck drivers, engineers, silviculture and most harvest crews. Then there are managers, consultants and other technical people live in larger centers.


How do milking sheep rate for meat production? Presumably 50 % of the lambs are Rams, and go to the works?


Otago Study (unpublished) by an (unnamed Farm Sector Group) - wonder why?


  • Forestry in the South Otago Region (including harvest and mills) generated 7.55 local jobs per annum per 1,000 ha.
  • Sheep and beef farms in South Otago are estimated to generate 6.4 local jobs per annum per 1,000 ha. (this included all downstream processing).

As well as harvesting there are four mills located within the region and timber is processed through these. Direct local employment has been adjusted to reflect this as it has been in the sheep and beef example to include meat works and stock agents. As such, there is another 1 job per 1,000ha to process the timber.

Forestry in South Otago has a more consistent employment than other regions because of the harvest profile. The regularity of harvesting means gangs can be based locally. Processing also occurs within the region further strengthening the employment in the forestry industry within South Otago. As such, there is also a steady local job market in the forestry sector within the region.

  • Sheep and Beef farms in South Otago had a direct local expenditure of $278,237 per annum per 1,000ha.
  • Plantation Forestry in the South Otago Region had a regular direct local expenditure (excluding harvest costs) of $84,123 per year per 1,000 ha
  • Plantation Forestry in South Otago had an irregular direct local expenditure (including harvest costs) of $480,175 per year per 1,000 ha.

Forestry has an irregularity and lag phase in expenditure before harvest occurs (i.e. little spend occurring prior to harvest). Typically, this will have a detrimental effect on local communities, however, because there is such a spread of forest ages in South Otago the expenditure remains relatively consistent year on year within the region.

Nearly all regions now have this consistency of plant, tend and harvest.

Based upon the jobs per 1000ha the earnings per job is

Farming               $43,474.53 per job

Forestry               $63,599.34 per job

Compare this to the independent BDO report in Tairawhiti - 2021

Production Forestry ANZSIC codes show that the combined forestry and logging average earnings per worker in 2019 in Tairawhiti was $64,900 per annum32 .

Pastoral Farming ANZSIC codes for agriculture showed average annual earning per worker in 2019 in Tairawhiti was $48,000 per annum33.

A clear trend of both industry’s providing the same amount of jobs per ha and on average the forestry industry is paying 30% higher wages.

GDP in independent Gisborne report per 1000 ha

Agriculture          $419k 

Forestry              $1.113k

Both produce around 7 jobs per 1000ha



Are you really saying sheep milking and carbon are the reason for Pamu profitably as the article suggests? 

both activities are small scale and early in their investment phase , and probably not contributing any ebitda at this stage