August 13, 2008

Drought and Dairying Put Squeeze on Lambs


Drought and the dairy boom have combined to cause a 23 per cent drop in export lamb numbers this year - a shortfall that could cost the country $450 million in lost income.

Meat & Wool New Zealand says the long summer dry felt across almost all parts of New Zealand forced farmers to shed large numbers of breeding ewes. At the same time 300 extra dairy farms were created, taking land that would have been used to finish lambs for slaughter.

Economist Rob Davison said yesterday that six million fewer lambs would be killed for export, compared with last year. Based on a prediction last week by Silver Fern Farms chief executive Keith Cooper that lambs would be worth $75 to $80 each this year, the drop is estimated to take $450m to $480m from exports.

Davison said dairy expansion, driven by strong global demand for dairy products and high prices, had occurred alongside poor export lamb prices in the past three seasons.

This was compounded by an increase in cropping at the expense of sheep numbers. This was because crop prices had increased 50%. He expected export lamb slaughter to fall to 20.3m lambs, down three million in each island, this year and to rise to 22.3m next year.

Sheep numbers would be down 4.3m to 34.2m this year.

Dairy cattle numbers have lifted 6.1% up to 5.6m, up 170,000 head in the South Island and up 150,000 in the North. He expected the dairy herd expansion to continue.

Meanwhile, beef cattle numbers had dropped 3.2% to 4.25m this year.

"Recovery from the drought is expected to be slow as the sheep and beef sector adjusts to there being less finishing land due to dairy conversion," he said.


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