Iain Hyndman: Are trees killing the golden goose that lays the golden agricultural egg?

An ever-increasing number of capital stock are coming off the hills to be sold to make room for trees.

Are we in danger of killing the proverbial goose that lays the golden egg?

There are a growing number who believe so, including independent Whanganui livestock commentator, trader and rural real estate agent, David Cotton.

"What will be interesting given the confidence in the sheep industry at the moment is the huge amount of land being sold to forestry," Cotton said.

"We are seeing an ever-increasing number of capital (breeding) stock coming off the hills to be sold, but the danger is whether we will have enough farmland left to accommodate them."

Cotton said there were finishing farmers turning over 15,000 stock units a season, but not all at once - they came in mobs throughout the season. Then there were the traditional hill country store farmers now finishing their own lambs.

"Farmers that traditionally produced store stock and now finishing their own using the latest green feed crops and new grasses, but these are the same farmers who are now selling their farms to forestry. I think stock agents are in for a very good commission year given the number of stock units coming out of the hills and continue to come out.

"My advice to those agents was to set aside some hay in the shed for future years as the number of store livestock to be sold is going to plummet."

Cotton believes this could well impact across the entire New Zealand agricultural industry.

"As these farms are taken out of livestock production for trees, carbon farming and honey production we are in danger of killing the goose that lays the golden egg. I support tree planting with the right tree in the right pace, but I do not support blanket planting of trees that take out good productive land.

"Up until now the shortage of supply has kept the store markets strong all year and the current kill price is $7.70/kg, a record high for this time of year. The mutton price at $5.50/kg and this is also as high as I've seen it and this is what is underpinning the scanned in-lamb values. The first scanned in-lamb ewes have started to hit the market with most sales at the top of last year's pricing."

Meanwhile, the lack of cattle feed earlier in February/March and now with the arrival of rain has kept the lid on cattle prices.

"The market is steady over the last few weeks, but well behind the highs of the last few years. I have not had so many capital stock cows offered to me. They too are coming off the hills because of the trees," Cotton said.