Global Ovine: Where New Zealand’s sheep industry is heading

Discussion in 'Livestock & Forage' started by News, May 10, 2014.

  1. News

    News Staff Member


    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:


    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.


    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

    Fast Laps, Val and Jim, Otago hill country 010.JPG
    Developed hills at 1500 to 2000 feet asl.
    Fast Laps, Val and Jim, Otago hill country 012.JPG
    Newly developed hills at 2800 feet asl. The ewes are the South Island hill country Central Progeny Test evaluation flock after AI in autumn.
    Fast Laps, Val and Jim, Otago hill country 013.JPG
    2500 to 3000 feet asl. In native condition (from same vantage point).
    Fast Laps, Val and Jim, Otago hill country 014.JPG
    Close up of same native pasture.
    Fast Laps, Val and Jim, Otago hill country 015.JPG
    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.
  2. JD-Kid

    JD-Kid Member

    Kinda agree GO the hills are the new wild west
    cost of bringing some areas out of native quite high tho with fert needed transport etc and rocks are tough on man and steel
    grass lands ummmm in some cases there is still a trend to use the wrong types in the wrong areas we know here ryegrass is close to a waste of time due to weather and pests the same can be said for some of the clovers , mind you rye and white is an eazy sell and know a few co's had simple brews they pushed as a one bag covers all
    fenceing and water on alot of the bigger areas is a huge cost

    biggest gains i can see is makeing the stock suit the country insted of trying to make the country suit stock even if it's just better store stock that will finsh better on whats left of the flatter eazer county

    i would add a bigger constraint is not the lack of tertiary educated graduates but the hard arses at the coal face all the trucking co's loseing drivers , shearing gangs looseing skilled staff , contractors not haveing good hill staff , fencers earth movers etc etc lack of young shepards even dogs are thin on the ground as well
  3. romneymarsh

    romneymarsh Member

    Romney Marsh
    Very interesting as always GO

    Reckon you guys need George Monbiot out there to set you right on grassing those uplands.
    Devil's advocate and exmoor dave like this.
  4. JD-Kid

    JD-Kid Member

    RM had to google him there are a few out here already if yer look at GO's pic yer will see the windmills in the background the letters to the papers were quite hot on the topic
  5. Post Driver

    Post Driver Member

    South East
    I read this and think fencing :D
    JD-Kid likes this.
  6. JD-Kid

    JD-Kid Member

    know one place did a heap of deer fenceing had 4 crews working full time for a few years ..
    Post Driver likes this.
  7. Crex

    Crex Member

    Innse Gall, Alba
    What work typically goes into transforming the native pasture into improved, and over what sort of time scale? Is it mostly accessible by tractor or are you talking helicopters?
  8. JohnGalway

    JohnGalway Member

    Connemara, Ireland
    Those hills are better than my fenced land 50m above sea level. 2,000+ feet is often bare granite.

    I'm off to run over an environmentalist to cheer myself up.
    exmoor dave, Gilchro and neilo like this.
  9. JD-Kid

    JD-Kid Member

    bit of both in some areas spray and pray can work in some areas depending on rain falls etc other areas tractors with a mix of DD or full tillage

    we have done all 3 here
    frist off you get a good soil test done thats going to give a hint of costs you need a good income to start with or on great terms with the bank
    for us captail fert is around 10 ton of lime and 1/2 a ton of super thats a 1000 dollars a Ha
    full working due to turf layer turf will not break down unless you over winter it so 2-3 passes with discs and a few passes with chain harrows seed tossed on with last lot of fert
    2nd year with turf broken down better seed bed so could go down perm grasses maybe around 5-700 dollars an Ha for the 2 years
    the soil will also be lacking N in most cases so use of N ferts will be highish untill system kicks in so that add's a bit to the costs as well

    DD the turf layer is a pain to get rid of could take 2-3 years worth of crops about the same in captail ferts
    2 sprays and a drill 2-300 dollars an Ha + seed per year
    most cases some earth works getting rid of rocks etc etc

    spray and pray catch 22 realy some areas the costs maybe high due to have to use choppers and planes for applying ferts etc etc plane here 100 dollars a ton for applying and in some areas the steep hills can be prone for slip's etc

    for ground running low numbers of stock the gains of improveing land can be worth it both in stocking rates and total value of the farm other areas it can change the system to higher gains more finshed etc

    the cost of fenceing is high in these areas due to size and getting gear on to lines etc etc most of these places talk in KM's of fenceing each year here we would have done 15-20 km's of new fences in the last 13 years along with R&M on old fences
    water same deal can be km's of pipe work to split up new blocks

    also buying in new stock to use the feed once done if lifting total numbers maybe employing more staff changeing farming mangerment to diffrent system etc etc

    bottom line for these large devloment's you need ball's the size of yer head cash in yer pocket or low intrest rates and to be fair know it may cost you your farm if it goes wrong and it can
    Crex likes this.
  10. Global ovine

    Global ovine Member

    Central Otago NZ
    Depends on the type of land. In the North Is. terrain is very steep (often steeper than 45 degs) this done with fixed wing planes after subdivision. In the Sth Is. hills are much higher but generally more gentle with more areas capable of cultivation. The two volcanic peninsulas (JDKid lives on one) are very steep with unique soil types to the rest of the Sth Is. Virtually all ferts are applied by fixed wing planes. Helicopters are more used for smaller scale specific work.

    The natural pH is generally low in NZ soils in their natural state. Lime applications are essential. Phosphorus is also low in all non volcanic soils. Generally superphosphate and lime are the largest inputs.
    The property in the photos is achieving the whole thing in 12 months. However the soil fertility of native tussock land had been built over many years with aerial topdressing of superphosphate. Where it hasn't it must go on as capital dressings followed up with annual maintenance dressings.
    Discing rather than ploughing is the preferred cultivation to get rid of tussocks. Winter swedes or soft turnips and oats are grown helping old organic matter to breakdown. New grass is sown in the following autumn (as shown in the photo). Where ploughing is done (must be free of rocks) it has to be ploughed a second time to restore the highest fertility layer back to the surface. Further pasture improvement is often done now by spraying out and direct drilling. By bringing soil fertility up to normal levels to support high pasture production, these pastures will last for decades under good rotational grazing management.

    The main work is subdivision, cultivation (or aerial over sowing), development of infrastructure (water, stock access lanes, handling facilities) all usually done by contractors.

    The payback on such developments is usually with 5 years. Some Banks now have special loans for such activities making development quite attractive.
    Devil's advocate and Crex like this.
  11. JD-Kid

    JD-Kid Member

    payback can be quite quick if the devolment is to run a stand alone biz if out of native the lambs that would have been stores are finshed the returns can start to cover the costs then the grassed down paddocks come in to the breeding side of it

    i'm supprised there are not a few contractors doing shearfarming deals IE they work up the ground and seed it down the farmer supplys the land and lambs they go 1/2 in the profit then the next year the farmer pays for the working and grassing down and they go in to a shearfarm deal on another block to grow a finshing crop
  12. Global ovine

    Global ovine Member

    Central Otago NZ
    Sounds like a reasonable idea if the farmer lacks access to necessary capital. But the contractor then takes on half of the risk role which has always been fully carried by the farmer. However the attraction of sharing the gain may also interest some contractors. I would be very necessary to study the market and see that this type of exercise is carried out on the recovery side of a commodity cycle (like the present) to avoid risk. Cycles usually last 6-7 years.
  13. JD-Kid

    JD-Kid Member

    yea it would be intresting most hill billy's lack the machinery and may fit in with contractors work load if timeing was right etc so a bit of a win win
    frist time up out of natives a bit more work so 2nd time round faster and cheeper to get in to grassland for the farmer also if the contractor is doing all the work for a % of profit it's in there intrest to make sure it works an extra pass may improve yeilds etc
    we see it here native ground with fert applyed small amounts of lift and in some cases nill newer paddocks better returns on fert etc
    BUT huge cost frist up so a shear crop/farm deal may work out well in some areas
  14. JD-Kid

    JD-Kid Member

    the maths is intresting just some rough numbers you have to keep in mind some of the native ground runs sweet FA over summer due to grass types etc so it's realy only weaned ewe country

    OK if i take a block tractor workable
    3 passes with discs towing bar's (railway irons for leveling ) $200 (all prices kiwi dollars ) per Ha
    lime 5 ton at 85 dollars a ton on the ground 425 per Ha
    1 pass chain harrows 20 per Ha
    1/2 ton super +4 Kg seed spread 200 $ per Ha
    1 pass harrows 20 per Ha
    total to put in a crop that can finsh lambs 865 per Ha

    mid sized store lambs were about 65 dollars on the place mid jan

    we kept some shore them about 1.5 Kg of wool at around 5 dollars a Kg less costs rough working 4 dollars a head clear
    a few drenchs not a lot of cost say 2 dollars just to put a number on it
    sold some today 97 dollars a head
    so 34 dollars diffrence
    to cover costs 26 lambs per Ha

    the rape will re grow so will be used for ewes better than what natives would do

    year 2 worked again cheeper due to turf broken down add another 5 ton of lime only maintance super so cheeper to put in 2nd year rape crop

    year 3 no lime just maintance super grass down

    umm i think i need a more run down farm and more iron HAHAHAHA
  15. $Sheep

    $Sheep Member

    New Zealand
    I am certainly in agreement with GO regarding the potential of sheep farming in NZ hill country. The tools are available now to increase productivity by land improvement (combined with good environmental stewardship), good genetics and smart savvy management. The changing face of global markets is about to have a significant impact upon farm systems when you consider how some Asian markets are now asking for heavy weight lamb 23 - 27 kgCW. If the price for lamb was to increase universally say $10 - $20 per head with same or flatter seasonal price trends and production costs remain relatively fixed and then imagine if the returns for wool improved by say $2 kg (clean) then farming sheep would take on a new intoxicating personality ... This is Heady stuff for a sheep farmer nowadays conditioned to working hard just to break even!

    As suggested by GO and JD-Kid the opportunity to improve land that is currently not performing very well yet has much potential to do so can with prudent capital expenditure be very rewarding. The key is obviously recognizing the potential difference and doing the right development at the right time without too many short cuts or inability to complete the task at hand. It is about having a plan A for action and a plan B for backup. There is always risk but the reward could be a very significant boost to the whole farm bottom line. With product prices looking good for the next year or so it certainly is a good time to ramp up productivity.
  16. JD-Kid

    JD-Kid Member

    it's the getting up from getting kicked from plan A ,B,C and D that takes a bit of doing the money for a lot of years has been aimed on the flat land
    there is still a lot of info lacking on hills it's getting better but there is still a lot of suck it and see
    i think we would all agree just putting high spec sheep on the hills maynot work it's like filling a F1 race car with water in the fuel tank same deal with better grasses on hills bit like filling mums morrie 1000 with raceing fuel sure it goes better but it's not the best use for it
  17. $Sheep

    $Sheep Member

    New Zealand
    Very true JD it is the farmer who takes on the development risk, short and long term. I would also be wanting security of return and so as you suggest high performance potential out of scrub could be disastrous. A hardier moderate performing sheep better suited for a tough environment that is consistently more reliable without fail year-in year-out whether it is a good year (lots of feed) or a bad year (no feed) would be more suitable. Fences and more fences, PKSMg fertiliser + Lime, hoof'ntooth and beef cows (small easily fleshed good doers) - nothing flash is a proven recipe.
  18. exmoor dave

    exmoor dave Member

    exmoor, uk
    reading all the above...............*jealous*!!!

    DEFRA and Natural England would crucify us if we tried to improve the hills like that!

    Doesn't even matter if you didn't take the SFP or environmental scheme money cause they'd do you under SSSI rules........also most open moorland is right to roam.
    romneymarsh likes this.
  19. JD-Kid

    JD-Kid Member

    we have been here 13 years over that time we have fenced off a block in to a qe2 trust (which can't be taken back out of trust ) to let the bush regen also with the better grazeing areas the bush in gullys is thicker as animals not grazeing in thos areas
    i also leave rock heaps for tussocks to grow back leaveing a 2 meter band around most paddocks for tusscocks to act as shelther as well as strips around creaks to filter out nitrates in to streams etc

    it can work hand in hand some land is best suited to higher agri use some best retired and alowed to regen to native bush etc etc we have a foresty block where about 40% of it is in native at the time it was done it was thought best for the ground time has showen some would have been better grazed to control weeds etc gorse broom etc is classed as a weed and has to be controled
    cost in foresty block about 10 000 dollars a year just on gorse control with out any income from that area

    native logging is controled so you don't see large areas clear felled to bring in to agri land use and to be fair some of that ground best in trees same here there are areas that would be best planted in foresty eather for carbon sinks select logging and shelter funny thing is to plant trees need permits but yet let the ground get covered in gorse get fined and the gorse sprayed at owners cost by court order ( yea a dick head ruleing )

    the rules are getting tighter RMA's building permits splitting up land land clearing etc etc fert use if i had to look in to the crystel ball 15-20 years time maybe less un improved land maybe untouchable i don't think thats a good idea as a blanket cover there should be areas that can be improved and i think it can be showen the improved ground improves the left native ground so a win win

    worst thing that is showing up is like the early settlers that come out they tryed to make countrys like home hence rabbits deer goats hares gorse etc etc etc all that become pests years later quite a strong union movement alot maggie kicked out turned up .. i can recall the strikes years ago over bull5hit things think even one works went out over the type of coffee

    now we are seeing more eco things alot wanting NZ to be little england we are seeing more and more people in enviromental areas with strong english ties to be fair some of them can get back on the plane and fork off
    the kiwis don't have the tax payers to have play grounds even tho there is alot of NZ in parks along with farmers and land owners putting bush ,wetlands etc in to trusts
    it's intresting with haveing 2 QE2 trusts on this place talking to the people who look after them for a start they are kinda anti devolment but they start to see how the chance in land use can work for both GO knows a block below our house that i would say in another 15 years we might just light graze it as the native scrub is getting thicker's rocky steep walking only low grazeing value from a enviro point it's better to revert the grazeing helps with some animals etc
    with haveing better grazeing ground these areas improve where as if unimproved the grazeing is harder in those areas leading to more damage
  20. exmoor dave

    exmoor dave Member

    exmoor, uk
    @JD-Kid I think we need to fly you over to give natural england a good talking to!
    I'd say we've already gone well past the stage where a lot of ground is untouchable......unless "they" want something doing!
    A few weeks ago I was told that there's plans a foot to clamp right down on burning/swaling.

    Commons are a difficult one cause its shared by so many, improvements lead to bickering!

    I have a 600 ac and a 190 ac blocks of moorland (scrub basically), even leaving aside the landlords own rules, I'm still not allowed to sub divide cause of right to roam,
    And I can't fert,lime, seed or spray anything due to it all being SSSI (for which nothing is paid to me). All I can do is very limited annual areas of burning and cutting.
    It's really sad to watch the hill deteriorate so much in in my short life time from managed heather and grass to gorse bracken and brambles, & now trees are coming up thro the gorse!

    It's so frustrating because me, my bro and plenty others round here are young and keen and prepared to put a lot of hard graft in to the hills to make them pay :(

Share This Page