Clive Dalton: Meat the next major challenge

Dr Clive Dalton

With the dairy industry hogging the limelight in the news media, it is easy to overlook the fact that New Zealand is a world leader at producing sheep meat - despite the number of sheep dipping to just six per head of population.

The New Zealand sheep flock is purportedly the smallest it has been since 1943, quashing the 1980s adage that this country is home to 60 million sheep - the basis of many a joke from overseas tourists.

Beef+Lamb New Zealand say sheep numbers as at June 30, 2015, provisionally totalled 28.6 million - down 4.1 percent on the previous June.

National country manager for real estate agency Bayleys, Simon Anderson, said the drop in numbers was driven by tighter feed conditions and weaker prices - which led to a decrease in the number of both total hoggets (-2.6 per cent) and breeding ewes (-4.5 per cent).

North Island sheep numbers provisionally decreased 1.8 per cent to 14.1 million at 30 June. Within this, breeding ewe numbers at 9 million were down 3 per cent while hogget numbers held steady at 4.8 million.

"The Northland and East Coast areas underpinned this decrease, due to the combined effect of two consecutive years (2012-13 and 2013-14) of drought in Northland, and tight feed supplies leading into winter 2015 for East Coast which contains 52 per cent of total sheep in the North Island," said Mr Anderson.

"South Island sheep numbers provisionally decreased 6.3 percent to 14.5 million at 30 June, 2015. The largest decline occurred in Marlborough-Canterbury due to drought conditions in North Canterbury, which resulted in tighter feed supplies going into winter."

In releasing Beef + Lamb's new season outlook 2015-16, chief economist Andrew Burtt said sheep meat supplies in Australia and New Zealand should support prices - although uncertainties remained around China's demand for sheep meat.

Sheep revenue is predicted to increase 2.6per cent, including a 4per cent increase in lamb farmgate prices, to an average of $5.47/kg. The expected average lamb price for 2015-16 is $100 per head, up $5 on the previous season.

In the latest ANZ Agri Focus report, economists confirm that beef prices continue to rise while farmgate lamb prices have stalled largely due to sluggish import demand from our two main markets: the UK and China.

Mr Anderson said success in this red meat and wool sector would require more skills in market development - including market-led product innovation, cultural and language capability; supply chain management and production skills; and science and technical support capabilities.

"Sheep numbers have progressively declined since the mid-1980s, due to dampened wool prices, significant and prolonged drought periods and the widespread conversion of sheep and beef properties to dairy," Mr Anderson said.

Outspoken advocate and champion of the sheep sector, former Ruakura Agricultural Research Centre scientist Clive Dalton asks with some concern: "Who will save the sheep industry?"

He claims sheep are the only long-term sustainable option for our hill country, and New Zealand needs to concentrate on what it does best - which is farm sheep for meat and wool.

Dr Dalton says that with the Government still expecting to double agricultural export earnings by 2025, questions around the sheep industry need to be asked - and answered.

"All the media hype about the pain the dairy industry is suffering has overshadowed the parlous state of the sheep industry, which has been suffering for the last two decades or more," says Dr Dalton.

Dr Dalton asserts that New Zealand is a world-beater at producing sheep meat at a low cost from clean, green pasture.

"With ambitious export earning targets, Primary Industries Minister Nathan Guy had better find somebody quickly to save the sheep industry," said Dr Dalton bluntly.

"Reasons for this are not hard to find. Just think sustainable land use and environmental protection, or just think water. Dairy farming - in the way it is progressing - is not sustainable and many observers are acknowledging this now."

"Today's sheep industry has no clear champion - either technical or political - and it still lives with the belief that things will come right on their own," said Dr Dalton.

"We have meat companies competing for the same stock, stock travelling the length of the country by road and sea to these competing companies, stock going via saleyards to the works so somebody can make a few dollars a head on the way, sheep standing in open saleyard pens in heat and cold, saleyards bristling with stock agents charging farmers commission then added yard charges. All this in the age of internet marketing and modern technology," he says.

"Saleyards are also a massive biosecurity risk for potential exotic disease spread, with many of them still a health risk in urban areas."

Dalton believes that meat companies are not the ones to sort the industry out.

"We urgently need new technology and research investment into the slaughter of stock and meat processing along the lines of the contribution made by the Meat Research Institute in the 1970s-80s."

Mr Anderson said the current lack of profitability at both production and processing was concerning and needed addressing, in parallel with fragmentation along the value chain between suppliers, procurers, processors, exporters, marketers, distributors, customers and ultimately, consumers.