Friday, March 29, 2024

PULSE: Nearly 5 million ewes lost in 10 years

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The breeding ewe flock continues to battle land use changes and wavering popularity with farmers. However, with many water regulations and policies negatively targeting cattle, sheep farming could find favour once again. Achieving any growth in ewe numbers will be hard in the next 12 months though.
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The latest Beef + Lamb NZ Stock Survey estimates breeding ewe numbers held at 16.86 million head. While the breeding flock has stabilised, there could be a real inability to build numbers. The number of hoggets that dispersed this year is the greatest issue. Drought conditions forced farmers to offload hoggets rather than keep them as replacements. This partially explains why the 2019 lamb crop was recently revised higher by over 500,000 head. 

Forecasts peg breeding hogget numbers to be back by 740,000 head on last year, mostly within the North Island. Chances are not all these hoggets were mated this year, or would have even entered the breeding flock next year, but the significant drop in numbers creates a couple of issues.

Firstly, the North Island lamb crop will be much lower due to less hoggets lambed this spring and lower scanning results in older ewes. Secondly, it raises questions over what numbers will be at ewe fairs in the coming summer. Many farms, particularly those hit hard by drought, are down on breeding ewes. The need to rebuild numbers will be a priority for some. If hogget numbers have been slashed, then it means little chance of excess two-tooths for sale from December. This, combined with the potential for heavier culling of older ewes at weaning, means buyers may be hard pushed to secure the replacements they are after.

And it’s not going to stop there.

With early forecasts pointing to a significant reduction in the spring lamb crop, farmers are going to have to weigh up how many ewe lambs are retained for breeding in 2021. This selection is going to be from a much smaller pool, limiting any further growth in breeding ewe numbers. 

In the space of 10 years, over 4.9 million breeding ewes have disappeared from the New Zealand farming system. Fortunately, productivity gains mean the lamb crop hasn’t fallen as hard or as fast, allowing NZ to remain competitive in the global market.

Most of the downside in the breeding flock has occurred in the last five years, coinciding with strong returns for lamb and mutton. It could be argued that lower sheep numbers have been the catalyst for improving farm gate returns. But international markets have shown the potential to take a lot more lamb than we had to offer in the past two years. That was evident by the record prices paid for our products, despite export volumes holding near historic levels. 

AgriHQ data shows NZ lamb’s average export value was nearly $1/kg lower than last year through May-August, owing to the aftershocks of covid-19 on export markets. While this means we have some ground to cover to get some strength back in the market, we shouldn’t use the current market as reason to keep dropping ewe numbers. Lamb values have fallen from the highs of the last two years, but this winter’s average export values (inflation adjusted) were still strong when compared to the five-year and 10-year average values despite being in a global pandemic.

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