Taranaki farmers face uncertain outlook despite grass growth after drought
The grass may be growing again in the drought-stricken coastal area of Taranaki, but the outlook for many farmers there is far from rosy.
In its latest report Beef + Lamb NZ’s economic service says 25.8 million lambs were tailed this season – a mere 1.2% up on last year, making it the worst lambing in 60 years.
Chief economist Andrew Burtt says the drought meant there was less feed available to ewes and their mating weights were down. However, lamb survival rates this spring were higher due to the mild weather and the overall average lambing percentage was 124%.
“The residual impact of the drought is even more pronounced when the lamb numbers are split by island,” Burtt adds. “Numbers were up 5.5% in the North Island, when compared to the drought-affected lamb crop of 2013, which was the smallest increase for the region since records began.
“Ewe lambing percentages were up across all regions, with a 7.1% lift on the East Coast, to 123.7%, which is noteworthy because the East Coast represents about 25% of New Zealand’s sheep flock.”
According to Burtt, this year’s export lamb kill will be 19.95 million – a drop of 1.9% on last season. The average carcase weight is expected to increase slightly to 18.4kg, mainly as a result of lower stocking rates and an expected ‘normal’ season.
Burtt says sheep farmers are now facing the dilemma of selling lambs or building up their flocks. It is difficult to generalise because every farm is different and every farmer looks at things in his own way. Burtt believes the early dry weather on parts of the North Island east coast may also have an influence on what farmers in that region do.
“Generally the guys there will be looking critically at their budgets – particularly financials and feed. Over many years, farmers have become better at making decisions.
“The smart guys are out there looking at what it’s going to cost them to feed their animals overall and looking at sheep relative to cattle and making calls early, rather than hanging on and hoping.”
Burtt says wool is still very much a part of the equation for sheep farmers. The farmers who perform well – especially financially – do a whole lot of things well.
“They don’t necessarily have the highest lambing percentage, or the highest calving percentage, or the best wool weights, but they haven’t neglected wool. They see it as an important co-product and there is still attention paid to it because you have to get a whole lot of things right to do well overall.”
Burtt says the outlook for sheep and beef is positive with the rising demand for red meat. He believes this gives farmers “underlying fundamental confidence,” which is positive for the red meat sector.
While China offers new opportunities for the red meat sector, the word is that most people are well aware of the risks of investing too much in one market and ignoring others in Europe and North America, he says.
And, anecdotally it seems more farmers are aware of consumer needs and the ‘paddock to plate’ concept is catching on. But farmers must focus on their customer – the processor and exporter.
