Beef cattle numbers (and the national sheep flock for that matter) are on the slide.
Just on 20 years ago, our beef cattle tally topped 4.5 million.
Beef + Lamb NZ’s June 2024 Stock Number Survey recorded a total of 3.55 million.
While a strong element of the 2.8% drop in beef cattle numbers in the 2023/24 year was due to drought conditions in parts of the South Island, the Beef + Lamb report makes it clear that the primary driver in recent years is the conversion of farmland to forestry.
Some 175,000ha of sheep and beef farmland have been converted to forestry in the last five years alone.
Each year that beef cattle numbers drop means there’s less demand for stud bulls and their genetics, and few breeding cows to produce calves.
The forestry being rolled out is mostly – but by no means exclusively – in the harder country that suits beef cattle and sheep.
Beef cows are brilliant at taking low-value feed and converting it into high-value protein in the form of calves.
When the land they graze is displaced by forestry, it’s not as if significant numbers of these animals are instead going to be grazed on the flats.
Understandably, the greener grass of that better land is the home for dairy cows or finishing animals.
Dairy beef isn’t known for its eating quality.
I would argue that even with putting beef bulls across dairy cows in second or third cycles, the value and eating quality are still lower than the prime steaks and roasting cuts from an Angus or Hereford.
So pines go up, and beef numbers dwindle.
Markets keep telling us of strong long-term demand for high-quality, grass-fed protein in the form of red meat.
With a fragile construction scene, wood-alternative building technologies and local timber mills on their knees, I’m not convinced long-term demand for Pinus radiata is as strong.
New Zealand does need production forestry – no argument at all from me.
And if a sheep or beef farmer sells for genuine production forestry (without the prospect of carbon credits unfairly tipping the balance), fine.
The problem is – even with the welcome tightening of the rules on what forestry qualifies for carbon credits announced last year – government policy still distorts rural land markets.
We are still seeing relatively flat farms in the South Island going into pines.
Federated Farmers is by no means alone in calling the NZ ETS broken.
The same message comes from the likes of the Parliamentary Commissioner for the Environment and Fish and Game.
Federated Farmers argues the ETS needs to be amended to end the ability of carbon dioxide emitters to offset 100% of their emissions with emissions units from carbon farming.
We want to see restrictions on more units entering the ETS, to help short-circuit farmland conversion to pines.
And the Overseas Investment Act needs to be amended to require applications to purchase farmland to convert to forestry to be assessed under the farmland test rather than the general benefit to New Zealand test.
