The farm sector has reached a historic point, with the profitability of lamb production outstripping dairy farming, says the nation's main researcher in pastoral agriculture.
"Sheep are taking over," Agresearch chief executive Andrew West said. "Lamb is the most phenomenal success story this country has."
Dr West said traditionally dairy
farms had always had the biggest economic farm surplus relative to total assets, but in the past few months sheep farming had taken over.
The sheep meat industry was in a "superb" position because it was working with supermarkets which were responding to the demands of consumers, to the point of providing sheep of a particular genetic background to the specifications of overseas retailers.
He said sheep farming performance was marked by the fact that New Zealand lamb was disappearing off New York restaurant menus simply because farmers could not meet demand.
New Zealand's meat industry would eventually have to move into South America and take over production systems and brands there.
Dr West said not only did demand for lamb exceed supply, but meat processors were now returning 70 per cent of the free on-board price for lamb to farmers, instead of the 50 per cent previously paid.
He questioned how the sheep industry could be considered as a commodity sector when compared with the comparatively low earnings of car manufacturers.
- NZPA
