Wednesday, 14 August 2013

Sheep farming in New Zealand: a UK view

In the first of two instalments, EBLEX Industry Development Manager Chris Lloyd blogs from New Zealand where he is currently on a fact-finding visit with a delegation from the UK sheep sector

After a seemingly never-ending flight, we arrived in Wellington on a beautiful mild spring day to discover that New Zealand’s North Island was enjoying 'Sprinter', with low rainfall, and higher-than-average winter temperatures encouraging good grass covers. Given everything is out-wintered here, that would seem a blessing, but with the goal being to clear pastures of old grass ready for spring, it appears to have been somewhat of an annoyance.

Our second day here was spent driving an hour and a half east of Wellington to meet a group of Wairarapa farmers to chat about common issues. As always when meeting farmers, you find a warm and friendly welcome. It brought home that it was not just UK farmers who suffered the price troughs experienced last winter. Discounted NZ lamb and low farmgate prices hit hard in the Southern Hemisphere also, while the worst drought for many years added to some of the marketing problems.

We had an interesting discussion about the pressures faced by their processors/exporters who can often operate largely on borrowed capital to buy lambs. With a large percentage of these frozen for sale at appropriate times in the season, the length of time before they get paid averages 114 days. That's a vulnerable period to cover with borrowed money if prices or exchange rates shift against you.   

Our trip isn't really focused on technical production issues, so we are visiting only a few farms, but we did see what will be the first of this season’s new lambs. However, we were surprised to find large numbers of old season lambs also, all shorn and finishing on grass and legumes (chicory and plantain), and with many heading close to 12 months of age.

One of the key aims of the visit is to explore the shared challenges and opportunities the UK and New Zealand sheep industries face – and one of those opportunities is definitely China. While we are still working on market access, New Zealand exporters are now able to start selling into mainland China and it is enlightening to hear how highly Beef and Lamb New Zealand, plus their exporters, rate the potential for the Chinese market to grow both in terms of value and volume. A growing affluent element of the population has disposable income and a desire for Western tastes, which include lamb cuts beyond the traditional cheap cuts and casseroles.

A meeting with a major processor and exporter gave a fascinating insight into how the alternative harvesting of bits from sheep have uses in the medical industry, as well as other non-food markets. The New Zealand government doesn't support many things financially, but it does encourage research if match funding is available. In this arena, as well as production related research, there are a number of commercial interests which participate in consortiums and input funding. They see the value of new technology and implementing new ideas and innovation. Is this something that we could look at more in the UK?

Many discussions though remain dominated by the impact of land conversion to dairy farming and its effect on the future of the lamb industry here. For every hectare used for dairy farming, there is a further 0.6ha of land required for dairy support, namely for rearing heifers. Returns from milk production far outstrip lamb production, so no one would be surprised to see the NZ lamb industry continue to decline in size.

It’s dangerous to draw sweeping conclusions from snapshots of a visit, but already it is proving an interesting comparison to my previous summer visits to this beautiful country. 

(Part two of this blog will be posted in two weeks’ time)