NZ flock decline continues

New Zealand sheep flock decline continues


Sheep
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It seems the Kiwis don't love their sheep quite as much as they used to. And that's good news for Aussie farmers.

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Growbulk sheep in the eastern Southlands of New Zealand.

Growbulk sheep in the eastern Southlands of New Zealand.

ACROSS the ditch dairy is now “king”.

However the switch from sheep to beef cattle also continues with Beef and Lamb New Zealand forecasting further growth in the beef herd at the expense of sheep and lamb.

At a time when Asian demand for sheep meat is on the rise, the reduction in supply from our only real international trade competitor is helping support Australian lamb and sheep prices.

On the back of the forecast lower breeding stock, the NZ lamb crop is anticipated to decline 3.8 per cent to 22.8 million head, while the beef herd is forecast to increase by 1.9pc.

Over the past fifteen years, a distinct pattern of declining supply has been in evidence.

While the 2016, 2011 and 2009 seasons saw bigger flock reductions, at around a 5pc decline for breeding ewes and 10pc decline for the lamb crop, the latest forecast remains significant enough to have an impact on the overall flock size (Figure 1).

The Australian flock rebuild stalled into winter as the dry conditions in NSW made it difficult to continue to grow numbers.

However, robust wool and sheep meat prices will encourage a flock rebuild once the climate returns to a more favourable setting.

The breeding intentions from the AWI-MLA Sheepmeat February survey signalled that 29pc of Australian producers were intending to increase the flock and while currently on hold, it’s likely to return once conditions allow.

What does it mean?

In global export terms, Australia and New Zealand supply around 70pc of the sheep meat market and in many of Australia’s key international markets NZ is our only real competitor.

On top of the 2017 trade into Asia of $2.1 billion, OECD forecasts for the next five years suggest that demand for sheep meat from Asia is set to average around a 2pc growth rate, annually.

With NZ supply forecast to continue to decline, the demand from offshore will need to find a source country to secure product and Australia is the obvious solution.

Our mutton exports into Asia have been tracking 16.6pc above average in 2018 and lamb exports have been even more impressive, at 35pc above average.

Asian demand for our sheep meat has underpinned the solid prices enjoyed this season and with the NZ sheep industry continuing to contract, there is not much to suggest this won’t continue.

The story NZ flock decline continues first appeared on Farm Online.

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