Sheep farming vital, ripe for higher returns
New Zealand sheep farmers could and should be earning more for their products, a sheep industry advocate has told scientists at AgResearch's Ruakura campus.
Shifting into a higher earning bracket would result in a more vibrant pastoral sector, Steve Wyn-Harris said.
The Central Hawke's Bay sheep farmer and columnist was in Hamilton recently as guest speaker at the New Zealand Institute of Agricultural Science's Waikato branch's monthly meeting.
He said only 10 per cent of New Zealand sheep farms made a high- earning $650 per hectare farm surplus.
The bulk of the industry had to be shifted into that bracket - "and it can be done".
He described himself as unapologetically flying the flag for the sheep industry.
High-income-earning farmers were using technology and science and it was no accident they earned more than other farmers, he said.
"This is the untold story of New Zealand agriculture. At the top end there's a bunch of sheep and beef farmers doing pretty well."
The key features of these farms were high lambing and calving percentages, high slaughter weights, high production of wool and low loss rates.
"It all equals economic efficiency."
Achieving this meant following time- old farming practices - judiciously using the right type of fertiliser on the right places, using good subdivision to control pastures, using good water systems, genetics and management.
"It's a four-legged stool and it's a basic recipe," Wyn-Harris said.
It staggered him that fewer than 10 per cent of sheep farmers and an estimated 30-40 per cent of dairy farmers used a feed budget.
"I thought it would have been 100 per cent. It's basic technology that's sitting on the shelf that science delivered us decades ago."
A vibrant sheep industry was needed for risk management. Another food safety issue such as the recent botulism scare or drought could expose the dairy industry again and the national economy needed other options, he said.
While the dairy industry represented an $11 billion industry, the county's meat industry was $8b.
"It's not insubstantial, it's still vitally important."
Not all of New Zealand's farmland was suitable for dairy or dairy support and it would surprise many to learn that 80 per cent of New Zealand's pastoral agriculture was still in sheep and beef, he said.
"It's still a big part of the landscape and always will be."
While sheep numbers had declined over the years, there had also been unparalleled productivity gains, he said.
"Science and technology has really helped us get into a good position."
The national lambing percentage had jumped from 100 to 122 per cent between 1990 and 2010 on lesser-quality land. Added to that was the increase in lamb weights, which rose from 13-14 kilograms to 18.3kg over the same period. These gains had been made on lesser-quality land as more of the good land was converted to dairying.
"The better-quality land is always being nibbled away by dairy and by urbanisation."
Another positive was the increase in productivity.
The "elephant" in the rural economy was the amount of debt within the dairy sector, which had steadily increased to $70b. However, the lower level of debt among sheep and beef farmers was the reason many had survived over the past 20 years despite the number of sheep farms falling by 6000 between 1990 and 2010.
"We're much more conservatively geared," Wyn-Harris said.
At the same time, hill country farms had increased from 38 per cent to 50 per cent as dairy farms took over the more productive land.
He said the industry was being let down by wool prices. This was the "real sadness of the sheep sector".
At its height in the 1950s, the wool clip represented 70 per cent of a farmer's income. When he started farming in the early 1980s it represented about 35 per cent of his income. Today it was 8-9 per cent.
He also warned about relying too heavily on the Chinese market.
China had come from nowhere to become a major export market for sheepmeat thanks to demand for cheap flaps rather than the more expensive cuts.
"They can turn it off just as quickly as they turn it on."
China's tightening of the controls around companies exporting infant formula was an example of this. "They are not the world's greatest traders for nothing. They have been doing it for 2000-3000 years. We need to be wary."