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EMBRACING CHANGE AND OPPORTUNITIES
Where New Zealand’s sheep industry is heading
New Zealand was considered part of the UK’s farming resource especially since refrigerated shipping. It was logical that a new colony only thought of the “mother country” when production of meat and wool rapidly expanded around 120 years ago and much of the world’s wealth was in Europe. The UK was within one flight away from 80% of the world’s middle income earners over the 35 years prior to the early 21st century. Now NZ is only one flight away from 80% of the world’s middle income earners, such has been the rapid shift in global economic activity and wealth. So what does this mean to sheep farming in NZ....... opportunities?
New Zealand has a farming culture of change being a young country with few generations of management all advancing farming from rain forest to pastures. Intergenerational change is expected and encouraged, as primary production exporting is the source of wealth all Kiwis recognise and depend upon.
Over the last 15 years there has been rapid land use change from sheep farming to dairying purely a result of the financial disparity between the two industries. If the contour is flat to rolling, has ample water supplies and conversion capital is manageable, then sheep returns to increased land values looks comparatively poor. This has resulted in a huge shrinkage of breeding ewes. Twenty years ago NZ had 18,000 sheep and beef farmers and 6,900 dairy farmers, now it has around 12,000 of each.
New Zealand has only reduced lamb production tonnage by less than 10% despite almost halving its ewe flock. This is due to genetic and management improvements in equal parts resulting in 86% improvement in lamb production per ewe. The NZ sheep industry is the rock star of animal based industries worldwide. The highly acclaimed NZ dairy industry can only boast 31% improvement in milk solids per cow. What is more astounding is that this improvement has occurred when the remaining breeding flock has become more concentrated into the hills as dairying steadily expanded into the traditional lowland sheep breeding/finishing country.
Will this trend of dairy expansion and increased sheep productivity continue into the next 20 years? The wise money is backing dairying to replace around another 2 million ewes before the national flock claws back numbers due to further land development via intensification of hill country. The blue print for the future has been formulated and has financial commitment by all sectors of the red meat industry from farming, processing and even through to banking. Productivity improvement of NZ pastoral hill country by another 40% is considered possible given the application of today’s technologies over the coming 20 years. Research developments into the future will offer further breakthroughs, but only a quarter of farmers historically take up new technologies within the first 5 years of release. The red meat sector’s Primary Growth Partnership with a capital fund of $NZ64M (half from Government and half from major participants in the sector) has taken on a serious commitment with programmes now coming into place to drive it.
Farmers in NZ are driven by profit. If the financials for further development stack up, they will undergo change to make it work. The two big areas are management and genetics:
Management;
Hill country development occurs by firstly subdividing to gain grazing control for the benefit of both the new pasture and the grazing animals. This is immediately followed by development applications of fertiliser and lime to correct nutrient status sufficient to establish the improved pasture sward by either over-sowing or cultivation if terrain permits. The third is the funding of the expanded flock/herd and the additional infrastructure to handle larger numbers and increased stocking rates. Trading banks have come to the party offering lower interest rates over a five year term making such capital expenditure very attractive to most.
Genetics;
Since NZ underwent radical economic reform in the mid 1980s, the number of ram breeding flocks has more than halved. Nearly all rams are now sold with performance records with 20% of breeders supplying 80% of the rams. Farmers expect a newly purchased ram to leave progeny which will outperform those by rams purchased in earlier years. New Zealand sheep breeds are expected to perform in all environments, as improved hill country produces swards similar to lowlands, but over a shorter growing season depending on altitude.
The tools available to breeders are increasing in effectiveness and accuracy. Genomic analysis is being taken up by those breeders supplying large numbers of rams; NZ breeders lead the world in the uptake of this technology. Many of these breeders have fully recorded flocks counted in the thousands run under typical commercial conditions. The power of population genetics is the driver of the NZ sheep genetic engine. Hence the very important traits with low heritability but high impact on profit, such as fecundity, lamb survival and resistance to disease, are now capable of much faster progress. Expect to see the number of ram breeding flocks reduce further as market demand favours the most progressive breeders.
New Zealand is blessed with two interdependent structures to asses genetic progress, the Central Progeny Test (CPT) where rams of all breeds are progeny tested across 5 flocks in very different environments and analysed by both Maternal and Terminal Traits (eBVs and Indexes) in tandem with the Advanced Central Evaluation (SILACE) which uses the CPT as the common linkage subsequently enabling sires only used in the home flock to be compared on progeny performance for each trait right across the industry. Farmers and breeders can access these ranking lists to see how their sires, or more importantly who are the breeders whose stock are excelling in traits they consider important for their flock. The annual 2% increase in genetic performance across the NZ flock is expected to increase as a result of these technologies.
There are constraints to the opportunities NZ faces: lack of tertiary educated graduates to work in all sectors of the pastoral industry where the demand exceeds 1000 per year when currently the supply is under 100; very high land prices driven by other land uses prohibiting aspiring farmers entry into the industry unless backed by family or corporate money; and lack of nationally available capital to further develop downstream infrastructure, especially in processing despite over 60% of sheep meat processed going through farmer owned co-operative structures.
Farmers in the UK may wonder why all the emphasis in the on-farm improvements in NZ. The answer is simple; we cannot expect the retail price to improve above the level of inflation, because sheep meat is already positioned at the luxury end of the protein options. Some efficiency will be made as surplus slaughter capacity gets closed and new packaging technologies are made specific to each market. The wholesale buyers have enormous strength in most developed economies leaving little wriggle room for increased prices to suppliers. Therefore this leaves the main opportunities for business growth within the farm gate.
Opportunities abound for NZ. Already it has free trade agreements with over half of the world’s population and several more trade agreements proceeding.
Hill country development is poised to accelerate due to a much better choice in regionally specific pasture cultivars, fertilisers and regionally available financial and production benchmarking for farmers to compare and identify areas of strength and weakness. Sheep meat is having another upward trend in its commodity cycle which is expected to last another 3 to 5 years to fund development. But most of all there is the expectation that each generation will crank up the farm to another level of performance.
The following pictures are taken of hill country development in central Otago on the South Island. This is snow country in the winter.
· This 3036ha hill farm is developing 10% ( about 350 ha ) of native tussock per year. It is the home of the South Island Hill Country Central Progeny Test evaluation flock
· Now run 10000 breeding ewes + replacements, finishing 16000 lambs, grazing 4000 slaughter ewes for processor, 500 beef cows + replacements, finishing all calves to slaughter
Developed hills at 1500 to 2000 feet asl.
Newly developed hills at 2800 feet asl. The ewes are the South Island hill country Central Progeny Test evaluation flock after AI in autumn.
2500 to 3000 feet asl. In native condition (from same vantage point).
Close up of same native pasture.
Close up of new grass after winter crop out of native state.
Murray Rohloff
Sheep genetics and management consultant
Eight years at Invermay Agricultural Research Centre in sheep reproduction physiology (prolific flock management, breed comparisons and lamb survival studies).
Twenty five years as a leading progressive ram breeder. Awareka rams mated over half a million commercial ewes annually. Many Awareka sires have featured as trait leaders on SILACE. An instigator of Sheep Improvement Ltd. (industry owned national sheep recording facility) and instigator and leading breeder for host resistance to internal parasites. The Awareka flock was sold in 2008 and has since won the most awards for maternal breeds in the NZ Sheep Industry Awards under its new ownership since their inception in 2012.
Increased involvement in strategic and business planning of farming and restructuring of veterinary businesses since 2002. During this time numerous visits to the UK and Ireland on instructional and speaking engagements organised by Teagasc, DARNI, SAC, Eblex, HCC and Suffolk Breed Society. Part of the set-up team for Sheep Ireland in 2008.
During the last 15 years have held ongoing science and advisory roles to AgResearch Ltd. (crown owned research provider) and Ovita Ltd. (research funding provider). Instigator and former chair of FT200, an industry owned sheep production and financial benchmarking provider.
Evaluated novel genetics for out-of-season lambing, especially 3 lambings in 2 years. The original importer of Charollais and Ile de France sheep breeds, now farmed in Otago under joint ventures. Chair of Charollais breed society.
A joint venture owner of EasyRams UK based near Ellesmere.
Specialist field is strategic planning of agricultural businesses to be more profitable through appropriate structures, goals, genetics and management.
Currently is a part time farmer with 350 Ile de France ewes on irrigated pasture in Central Otago.
www.easyrams.co.uk
Where New Zealand’s sheep industry is heading
New Zealand was considered part of the UK’s farming resource especially since refrigerated shipping. It was logical that a new colony only thought of the “mother country” when production of meat and wool rapidly expanded around 120 years ago and much of the world’s wealth was in Europe. The UK was within one flight away from 80% of the world’s middle income earners over the 35 years prior to the early 21st century. Now NZ is only one flight away from 80% of the world’s middle income earners, such has been the rapid shift in global economic activity and wealth. So what does this mean to sheep farming in NZ....... opportunities?
New Zealand has a farming culture of change being a young country with few generations of management all advancing farming from rain forest to pastures. Intergenerational change is expected and encouraged, as primary production exporting is the source of wealth all Kiwis recognise and depend upon.
Over the last 15 years there has been rapid land use change from sheep farming to dairying purely a result of the financial disparity between the two industries. If the contour is flat to rolling, has ample water supplies and conversion capital is manageable, then sheep returns to increased land values looks comparatively poor. This has resulted in a huge shrinkage of breeding ewes. Twenty years ago NZ had 18,000 sheep and beef farmers and 6,900 dairy farmers, now it has around 12,000 of each.
New Zealand has only reduced lamb production tonnage by less than 10% despite almost halving its ewe flock. This is due to genetic and management improvements in equal parts resulting in 86% improvement in lamb production per ewe. The NZ sheep industry is the rock star of animal based industries worldwide. The highly acclaimed NZ dairy industry can only boast 31% improvement in milk solids per cow. What is more astounding is that this improvement has occurred when the remaining breeding flock has become more concentrated into the hills as dairying steadily expanded into the traditional lowland sheep breeding/finishing country.
Will this trend of dairy expansion and increased sheep productivity continue into the next 20 years? The wise money is backing dairying to replace around another 2 million ewes before the national flock claws back numbers due to further land development via intensification of hill country. The blue print for the future has been formulated and has financial commitment by all sectors of the red meat industry from farming, processing and even through to banking. Productivity improvement of NZ pastoral hill country by another 40% is considered possible given the application of today’s technologies over the coming 20 years. Research developments into the future will offer further breakthroughs, but only a quarter of farmers historically take up new technologies within the first 5 years of release. The red meat sector’s Primary Growth Partnership with a capital fund of $NZ64M (half from Government and half from major participants in the sector) has taken on a serious commitment with programmes now coming into place to drive it.
Farmers in NZ are driven by profit. If the financials for further development stack up, they will undergo change to make it work. The two big areas are management and genetics:
Management;
Hill country development occurs by firstly subdividing to gain grazing control for the benefit of both the new pasture and the grazing animals. This is immediately followed by development applications of fertiliser and lime to correct nutrient status sufficient to establish the improved pasture sward by either over-sowing or cultivation if terrain permits. The third is the funding of the expanded flock/herd and the additional infrastructure to handle larger numbers and increased stocking rates. Trading banks have come to the party offering lower interest rates over a five year term making such capital expenditure very attractive to most.
Genetics;
Since NZ underwent radical economic reform in the mid 1980s, the number of ram breeding flocks has more than halved. Nearly all rams are now sold with performance records with 20% of breeders supplying 80% of the rams. Farmers expect a newly purchased ram to leave progeny which will outperform those by rams purchased in earlier years. New Zealand sheep breeds are expected to perform in all environments, as improved hill country produces swards similar to lowlands, but over a shorter growing season depending on altitude.
The tools available to breeders are increasing in effectiveness and accuracy. Genomic analysis is being taken up by those breeders supplying large numbers of rams; NZ breeders lead the world in the uptake of this technology. Many of these breeders have fully recorded flocks counted in the thousands run under typical commercial conditions. The power of population genetics is the driver of the NZ sheep genetic engine. Hence the very important traits with low heritability but high impact on profit, such as fecundity, lamb survival and resistance to disease, are now capable of much faster progress. Expect to see the number of ram breeding flocks reduce further as market demand favours the most progressive breeders.
New Zealand is blessed with two interdependent structures to asses genetic progress, the Central Progeny Test (CPT) where rams of all breeds are progeny tested across 5 flocks in very different environments and analysed by both Maternal and Terminal Traits (eBVs and Indexes) in tandem with the Advanced Central Evaluation (SILACE) which uses the CPT as the common linkage subsequently enabling sires only used in the home flock to be compared on progeny performance for each trait right across the industry. Farmers and breeders can access these ranking lists to see how their sires, or more importantly who are the breeders whose stock are excelling in traits they consider important for their flock. The annual 2% increase in genetic performance across the NZ flock is expected to increase as a result of these technologies.
There are constraints to the opportunities NZ faces: lack of tertiary educated graduates to work in all sectors of the pastoral industry where the demand exceeds 1000 per year when currently the supply is under 100; very high land prices driven by other land uses prohibiting aspiring farmers entry into the industry unless backed by family or corporate money; and lack of nationally available capital to further develop downstream infrastructure, especially in processing despite over 60% of sheep meat processed going through farmer owned co-operative structures.
Farmers in the UK may wonder why all the emphasis in the on-farm improvements in NZ. The answer is simple; we cannot expect the retail price to improve above the level of inflation, because sheep meat is already positioned at the luxury end of the protein options. Some efficiency will be made as surplus slaughter capacity gets closed and new packaging technologies are made specific to each market. The wholesale buyers have enormous strength in most developed economies leaving little wriggle room for increased prices to suppliers. Therefore this leaves the main opportunities for business growth within the farm gate.
Opportunities abound for NZ. Already it has free trade agreements with over half of the world’s population and several more trade agreements proceeding.
Hill country development is poised to accelerate due to a much better choice in regionally specific pasture cultivars, fertilisers and regionally available financial and production benchmarking for farmers to compare and identify areas of strength and weakness. Sheep meat is having another upward trend in its commodity cycle which is expected to last another 3 to 5 years to fund development. But most of all there is the expectation that each generation will crank up the farm to another level of performance.
The following pictures are taken of hill country development in central Otago on the South Island. This is snow country in the winter.
· This 3036ha hill farm is developing 10% ( about 350 ha ) of native tussock per year. It is the home of the South Island Hill Country Central Progeny Test evaluation flock
· Now run 10000 breeding ewes + replacements, finishing 16000 lambs, grazing 4000 slaughter ewes for processor, 500 beef cows + replacements, finishing all calves to slaughter
Developed hills at 1500 to 2000 feet asl.
Newly developed hills at 2800 feet asl. The ewes are the South Island hill country Central Progeny Test evaluation flock after AI in autumn.
2500 to 3000 feet asl. In native condition (from same vantage point).
Close up of same native pasture.
Close up of new grass after winter crop out of native state.
Murray Rohloff
Sheep genetics and management consultant
Eight years at Invermay Agricultural Research Centre in sheep reproduction physiology (prolific flock management, breed comparisons and lamb survival studies).
Twenty five years as a leading progressive ram breeder. Awareka rams mated over half a million commercial ewes annually. Many Awareka sires have featured as trait leaders on SILACE. An instigator of Sheep Improvement Ltd. (industry owned national sheep recording facility) and instigator and leading breeder for host resistance to internal parasites. The Awareka flock was sold in 2008 and has since won the most awards for maternal breeds in the NZ Sheep Industry Awards under its new ownership since their inception in 2012.
Increased involvement in strategic and business planning of farming and restructuring of veterinary businesses since 2002. During this time numerous visits to the UK and Ireland on instructional and speaking engagements organised by Teagasc, DARNI, SAC, Eblex, HCC and Suffolk Breed Society. Part of the set-up team for Sheep Ireland in 2008.
During the last 15 years have held ongoing science and advisory roles to AgResearch Ltd. (crown owned research provider) and Ovita Ltd. (research funding provider). Instigator and former chair of FT200, an industry owned sheep production and financial benchmarking provider.
Evaluated novel genetics for out-of-season lambing, especially 3 lambings in 2 years. The original importer of Charollais and Ile de France sheep breeds, now farmed in Otago under joint ventures. Chair of Charollais breed society.
A joint venture owner of EasyRams UK based near Ellesmere.
Specialist field is strategic planning of agricultural businesses to be more profitable through appropriate structures, goals, genetics and management.
Currently is a part time farmer with 350 Ile de France ewes on irrigated pasture in Central Otago.
www.easyrams.co.uk
