Growth of NZ's beef cattle herd continues

The annual stock number survey, conducted by Beef + Lamb NZ's Economic Service, showed 3.7 million beef cattle. Photo / File

New Zealand's beef cattle herd continues to grow, increasing 1.9% over the past year, while a decline in the sheep flock has been slowed by a lift in hoggets.

The annual stock number survey, conducted by Beef + Lamb New Zealand's Economic Service, showed 3.7 million beef cattle.

The largest contributor to the increase was a lift in weaner cattle in Marlborough-Canterbury which was driven by younger cattle being retained by beef breeders.

Otago-Southland's breeding cow herd increased 2.3% to 0.15 million head. That was driven by Otago which was up 3.5%.

Positive returns from beef, both store and prime, encouraged farmers to increase the size of their breeding herds, the report said.

There had been sporadic reports in those two regions of high empty rates for a variety of reasons. Cows had been in excellent condition because of favourable pasture growth, especially in Central Otago hill country which had a particularly good growing season.

Conversion of pastoral land into dairy farms in Otago-Southland had slowed down considerably compared with previous years.

The analysis revealed a younger ewe flock as farmers retained more hoggets for future production, BLNZ Economic Service chief economist Andrew Burtt said.

The number of breeding ewes fell in all regions and by 2.1% overall. Numbers dropped 3.5% to 8.3 million in the North Island while South Island numbers dropped 0.8% to 9 million.

The decrease largely reflected farmers taking advantage of strong prices for mutton. There was also a preference — particularly in the older farmer demographic — towards less labour-intensive livestock options for sheep, Mr Burtt said.

In Otago-Southland, the number of breeding ewes dropped 1% to 5.66 million head. The decline was the greatest on intensive finishing farms in both regions, and strong mutton prices meant ewes that were marginal to carry through another season did not get the opportunity to do so.

Hogget numbers increased 2.5% to 9.1 million nationally, largely from Marlborough-Canterbury where ewe hoggets were retained to replenish declining ewe flocks, and trade lamb purchases from Southland due to dry summer conditions.

The lamb crop was expected to be down 3.8% to 22.8 million. That followed a record lambing percentage the previous season and a smaller breeding ewe flock, but was moderated by a lift in lambs from hoggets mated.

With lamb prices cracking the $8 a kg mark, ASB's latest Commodities Weekly report said records suggested they were now at their highest levels.

Looking ahead to the new season, senior rural economist Nathan Penny was optimistic prices would remain "very healthy" but he was also wary of growing risks.

In particular, the escalating United States-China trade tensions could derail global economic growth and reduce global lamb demand.

The other risk was that consumer price resistance could kick in at the record levels. But, for the time being, farmers had good reason to celebrate, he said.