New Zealand sheep and cattle numbers down as carbon forestry, drought and low prices affect sector

New Zealand's sheep numbers have been dropping for the last decade. Photo / Duncan Brown

By Sally Murphy of RNZ

Drought and ongoing low returns for sheep meat have seen sheep numbers fall yet again – with the flow-on effects being felt in rural communities around the country.

Beef and Lamb New Zealand’s latest stock number survey shows sheep numbers fell 4.3% in the year to the end of June – to 23.31 million.

Breeding ewe numbers are down 2.9%, while hogget numbers dropped 7%.

It continues the trend with sheep numbers dropping for the last decade.

The report said in previous years, the primary driver had been land use change as a result of the conversion of sheep and beef farms into forestry.

This year the primary drivers were low sheep prices and drought in parts of the country.

“This has seen farmers needing to destock and has impacted on the outlook for lamb production for the coming season,” the report said.

Softer demand from China and Australia flooding markets with more sheep meat have seen prices plummet in the last year – that on top of rising input costs means many sheep farmers are set to make a loss this year.

“Livestock that might typically be wintered were sold to improve cashflow, additionally capital livestock were sold to bolster revenue as well – this loss of capital livestock will reduce lamb and calf crops in spring 2024 and affect future potential earnings,” the report said.

Canterbury and Marlborough, which have been dealing with drought, had the biggest drop in sheep numbers – at 12.2%.

Flock reductions of 30-60% were common in the driest areas such as Nelson and North Canterbury and complete ewe flocks were sold in extreme cases.

Huge flow-on effects

Beef and Lamb New Zealand chairwoman Kate Acland says that a drop in sheep numbers is having a flow-on effect in rural communities. Photo / Clare Toia-Bailey

In recent weeks, RNZ has reported of job losses at a Waitaki meat plant which was struggling to secure enough stock and shearing gangs have less work due to lower sheep numbers.

Beef and Lamb New Zealand chairwoman Kate Acland said with no recovery in sheep numbers in sight the flow on effects will continue.

“The sheep and beef sector creates about $11 billion in revenue for New Zealand and supports 90,000 jobs throughout farming and the processing sector and we know that sheep and beef farmers spend most of their money in their rural communities,” Acland said.

“So what we’re seeing is, in a lot of these rural communities, it’s having an impact, we’re seeing reductions in vets and services, we’re seeing local schools close or lose teachers, so the flow-on impact is here and it’s being felt in large parts of the country already.”

Acland said a lot of sheep farmers are getting extra jobs, selling to carbon forestry or transitioning into beef farming, which is currently getting better returns.

“Unfortunately, we’re not seeing anything that will signal a sharp turnaround, I mean, at Beef and Lamb we are really trying to focus on the factors that farmers can control on-farm, which is really building productivity and profitability.

“But we’re concerned about the critical mass of our sector, you know, the sheep and beef sector is an economic powerhouse for our country and it supports the biodiversity and those iconic hill country landscapes so it’s so important that we do rebuild the profitability and the confidence in our sector.”

Beef cattle numbers also drop

Beef cattle numbers fell 2.8%, according to Beef and Lamb New Zealand's latest report. Photo / RNZ, Carole Stiles

Despite beef prices performing really well this year, beef cattle numbers fell 2.8% to 3.55 million in the year to the end of June.

Beef and Lamb New Zealand’s report said the drop was mostly due to drought-related destocking in the South Island.

Breeding cow numbers were down across most regions and fewer older, heavier trade cattle were on hand at June 30, 2024.

“One possible reason for fewer older, particularly bulls on hand at 30 June is a reduction in calf rearers due to very tight margins two years ago creating a lack of these animals in the current market for processing,” the report said.

Like the drop in sheep numbers, Canterbury and Marlborough had the biggest dip in cattle numbers at 10.7% due to drought-reducing feed levels.

– RNZ