At least one million fewer lambs will be sent to the works next season because of the drought and declining sheep numbers.

The industry's boom-to-bust image, fluctuating meat returns, indifference over restructuring and the 2011 red meat strategy have forced many to look at other options.

Federated Farmers Bay of Plenty meat and fibre vice-chairman Barry Roberts runs 1700 ewes in a store stock operation. In January 2012 he got $85 a head - that plummeted to $40.52 this year.

"This bumbling along from one year to the next doesn't give you any confidence at all. We just lurch from boom to bust and it will take some time to sort itself out because this is not an easy fix."


He is thinking of diversifying into a dairy support operation to redirect business.

Beef + Lamb New Zealand chief economist Andrew Burtt said this year's spring lambing percentages across the country were expected to be down on the previous year's record of 122 per cent, because of breeding ewes being in lighter condition at mating. "This will see next year's lamb crop and subsequent meat production down ... possibly by around 1 million but it's too early to say more than that. Half the sheep flock is in the South Island which, while dry this past summer, did not experience the drought conditions that occurred in the North Island."

Federated Farmers Bay of Plenty provisional president Rick Powdrell said it was hard to know the overall effects of the lower lamb slaughter but he hoped it wouldn't spark a price war between meat companies. In 2012 he received $127 a lamb compared to $85 this year. "If there is a shortage of animals going through the freezing works I think they will be sensible about their pricing.

"I don't think they will be looking at it very pragmatically on the back of what is going on in the industry at the moment."

The forces driving price and seasonal variation were beyond its control, Burtt says.

"That is why we have monitor farm days to help to focus on and discuss those things that we can control and profitably improve behind the farm-gate."

In March, Beef + Lamb New Zealand's mid-season update estimated Bay of Plenty farmers' profit before tax for the 2012-13 season would fall 50 per cent compared with last season, to an average of $44,300.

The numbers


70.3 million sheep in 1982

39.57 million sheep in 2002

31.3 million sheep in 2012

North Island: 15.46 million sheep

South Island: 15.67 million sheep