Stock Number Survey as at 30 June 2015

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1 Contents Stock as at 30 June Executive Summary 2 Breeding ewes -4.5% 2 Hoggets -2.6% 2 sheep -4.1% 2 Ewe condition 2 Scanning 2 Lamb crop -5.7% 2 Beef cattle -2.2% 2 Introduction 3 Livestock numbers as at 30 June 3 Climatic Conditions Summer Summary 5 Autumn Summary % 6 Ewes Mated 7 Outlook for Lambing 8 Beef Cattle 9 Beef Cattle 9 Breeding Cows 9 Outlook for Calving 10 Beef + Lamb New Zealand Limited also referred to as B+LNZ, B+LNZ Economic Service and the Economic Service. All rights reserved. This work is covered by copyright and may not be stored, reproduced or copied without the prior written permission of Beef + Lamb New Zealand Limited. Beef + Lamb New Zealand Limited, its employees and Directors shall not be liable for any loss or damage sustained by any person relying on the forecasts contained in this document, whatever the cause of such loss or damage. Beef + Lamb New Zealand PO Box 121, Wellington 6140, New Zealand Phone: Fax: BEEFLAMB ( ) BY FARMERS. FOR FARMERS Contact: Andrew Burtt Chief Economist Rob Gibson Senior Agricultural Analyst Rob Davison Executive Director Adrienne Egger Agricultural Market Analyst Beef + Lamb New Zealand Economic Service August P15031 ISSN

2 Executive Summary TABLE 1 LIVESTOCK SUMMARY 30 June 2014 e estimate Source: Beef + Lamb New Zealand Economic Service, Statistics New Zealand Breeding ewes -4.5% For the year to 30 June, New Zealand s total breeding ewe numbers decreased 4.5 per cent to million. This was due to decreased numbers in all regions, the largest of which occurred in Marlborough-Canterbury. North Island numbers decreased 3.0 per cent to 8.97 million, while South Island numbers decreased 5.8 per cent to 9.92 million. These changes predominantly reflect carry-over effects of dry conditions and tight feed supplies in some regions, and some further contribution from new dairy start-ups coming online in. 30 June e % change Breeding Ewes % Hoggets % % Estimated Lamb Crop % Beef Cattle % Hoggets -2.6% Overall, hogget numbers decreased 2.6 per cent to 8.95 million head. This was due to the South Island decreasing 6.2 per cent, underpinned by dry conditions and the limited carrying capacity for these going into winter. sheep -4.1% sheep numbers for the year to 30 June decreased 4.1 per cent to million head. The largest decline occurred in the South Island, down 6.3 per cent compared with 2014, to million head. Ewe condition Ewe condition varied between regions. North Island ewe condition was generally good at mating, with average to better than average feed availability. The exception to this was parts of the East Coast which were affected by dry conditions and tighter pre-winter feed supplies. South Island ewe condition was also variable, but the most notable effect has been the impact of drought in North Canterbury and some parts of Marlborough, which affected feed supplies. Scanning Scanning results varied between regions. These were the same or better than the previous year for most regions. The biggest exceptions to this were lower pregnancy scanning results for East Coast and drought-affected areas in North Canterbury and parts of Marlborough. Lamb crop 1-5.7% The result of the above factors is that the lamb crop decreases 1.5 million head (-5.7%) on the previous season. This is due to expected breeding ewe lambing percentages easing 1.7 percentage points, fewer breeding ewes, and fewer lambs from hoggets compared with the previous season. Beef cattle -2.2% The number of beef cattle at 30 June, estimated at 3.59 million head, was down 2.2 per cent on the previous June and follows a 0.8 per cent decline for the previous year. The largest contributor to the decrease was the South Island, where total beef cattle numbers decreased 5.7 per cent, while North Island numbers decreased slightly by 0.8 per cent. 2 1 Beef + Lamb New Zealand Economic Service conducts an annual Lamb Crop that is published at the end of lambing in each November. This report provides current lamb crop estimates by region.

3 Introduction Livestock numbers as at 30 June FIGURE 1 LIVESTOCK NUMBERS This paper summarises the results from a survey carried out to estimate the numbers of sheep and beef cattle on hand at 30 June. This survey uses the and Beef Farm framework, which is a statistically representative sample of over 500 commercial sheep and beef farms. Economic Service Managers based throughout New Zealand collect information from farms at various points throughout the year. The livestock on hand at 30 June described in this report are the productive base for meat and wool production in the -16 farming and meat export years. (000 head) 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20, and Beef Cattle Trend Beef f 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Beef (000 head) In addition to the survey results, other information was used to estimate the number of sheep and beef farms converted to dairy including the impact of displaced stock numbers on existing sheep and beef farms. The results of the survey are reported by region for sheep in Table 3 and for beef cattle in Table 5. Source: Beef + Lamb New Zealand Economic Service, Statistics New Zealand Longer-term time-series of livestock numbers are shown at the national level in Table 2 for sheep and in Table 4 for beef cattle. Figure 1 shows the 20-year trend in sheep and beef cattle. 3

4 Climatic Conditions FIGURE 2 SOIL MOISTURE DEFICIT MARCH FIGURE 3 SOIL MOISTURE DEFICIT APRIL Historical average deficit at 9am on 1 Mar Deficit at 9am on 1/03/2014 Deficit at 9am on 1/03/ Historical average deficit at 9am on 1 Apr Deficit at 9am on 1/04/2014 Deficit at 9am on 1/04/ Source: National Institute of Water and Atmospheric Research Ltd (NIWA) 4

5 Summer Summary Autumn Summary Rainfall Rainfall was below normal (50-79% of normal summer rain) for much of New Zealand during summer. Areas that were particularly affected by the dryness include eastern Otago, Canterbury, Marlborough, Wairarapa and parts of Waikato where well below normal rainfall (<50% of normal summer rain) was observed. The district of Whangarei, coastal Bay of Plenty and south-western Southland were the only areas of New Zealand to receive near normal rainfall (80-119% of normal rain). Temperature Summer temperatures as a whole were above average (+0.51 C to C) for the majority of the South Island with the exception of Marlborough and coastal parts of Canterbury and Otago where temperatures were in the near average range (-0.50 C to C). In the North Island, temperatures were above average for parts of Auckland, Waikato and Bay of Plenty as well coastal portions of Taranaki and Manawatu-Whanganui. Summer temperatures were near average for the remainder of the North Island. Soil moisture As of 1 March, soil moisture levels were below normal for the time of year for most areas of New Zealand, with the exception of Central Otago and northern Southland. Mild for most of the country. Rainfall Rainfall was below normal (50-79%) or well below normal (< 50%) for some eastern areas of New Zealand including South Canterbury, North Canterbury, Wairarapa, northern Hawke s Bay and Gisborne. Rainfall was either above normal ( %) or well above normal (> 149%) for southwestern and western parts of both the South Island and North Island, and much of Waikato. Temperature Autumn temperatures were above average (+0.51 C to C) for many parts of the country. It was a particularly warm autumn in parts of eastern Canterbury, West Coast and Taranaki where temperatures were well above average (> C). Temperatures were near average (-0.50 C to C) in south-eastern parts of Southland and Otago, inland mid- Canterbury and parts of central North Island. Sunshine Autumn sunshine was above normal ( %) for eastern Bay of Plenty, East Cape, Gisborne, Hawke s Bay and eastern North Canterbury. Most remaining areas of New Zealand received near normal sunshine (90-109%). The exception was parts of Taranaki and West Coast where autumn sunshine was below normal (75-89%). Soil moisture As of 1 June, soil moisture levels were below normal for this time of year for East Cape, coastal Wairarapa, southern Marlborough and eastern parts of Canterbury. It was especially dry about North Canterbury where soils were considerably drier than normal. 5

6 -4.1% Overall, total sheep numbers decreased an estimated 4.1 per cent (-1.23 million head) on the previous year to million head at 30 June. This follows a decrease of 3.2 per cent during the previous year. Breeding ewes -4.5% The number of breeding ewes, at million, decreased 4.5 per cent compared with the previous June. In the previous year, breeding ewe numbers were impacted by continued dry conditions and land use change. Hoggets -2.6% The total number of hoggets decreased 2.6 per cent to 8.95 million head. The most significant declines occurred in Marlborough-Canterbury (-8.3%) and Otago (-7.5%). This was due to dry conditions and tighter feed supplies going into winter. Regional numbers In the North Island, there was a decline in total sheep, which was focussed in Northland-Waikato- Bay of Plenty. The total number of sheep decreased in all regions of the South Island, with the largest change occurring in Marlborough- Canterbury. North Island -1.8% sheep numbers decreased 1.8 per cent (-0.26 million head) to million at 30 June. Northland and East Coast underpinned this decrease, due to the combined effect of last year s drought, a shift in focus towards beef and tighter feed supplies going into winter. South Island -6.3% sheep numbers decreased 6.3 per cent (-0.97 million head) to million at 30 June. The largest decline occurred in Marlborough-Canterbury (-10.5%) due to drought conditions in North Canterbury which led to tighter feed supplies leading into winter. General comment The season experienced variable climatic conditions, weaker returns for lamb and strong returns for beef, with some slow-down in land use change and grazing activities. Climatic conditions varied by region. Northland-Waikato-Bay of Plenty and Taranaki-Manawatu experienced average to betterthan-average conditions, with localised dry conditions (Taihape) and floods (Taranaki, Whanganui and Manawatu). East Coast and South Island regions generally experienced poorer climatic conditions which led to tighter feed supplies and fewer stock carried into winter. This ranged from drought conditions for Marlborough, Canterbury and parts of Otago, to prolonged dry and snow conditions for East Coast. Firm returns for beef were most pronounced in Northland where income generated from this activity contributes around 40 per cent of gross farm revenue. However, for remaining regions, returns to beef have helped to buffer, more so than offset, poorer returns from alternative enterprises. Changes in land use and dairy grazing activities were most pronounced in South Island regions in response to the lowerthan-average milk price and rising environmental regulations. Dairy grazing activities for North Island regions did not change significantly. 6

7 Ewes Mated Breeding ewes -4.5% The total number of breeding ewes at 30 June is estimated at million, down 4.5 per cent. This is largely due to climatic conditions impacting on feed supplies leading into winter. North Island -3.0% North Island breeding ewe numbers decreased 3.0 per cent to 8.97 million head, due to a mix of climatic conditions and enterprise adjustments. Northland-Waikato-Bay of Plenty decreased 5.3 per cent to 2.34 million head. This was largely due to a carry-over from the previous season s drought when there was a 12 per cent reduction in ewe hogget numbers. East Coast decreased 2.4 per cent to 4.53 million head, due to tighter feed supplies leading to heavier culling. Taranaki-Manawatu declined 1.5 per cent to 2.10 million head. This was in part due to some hill country farms selling breeding ewes to increase deer and cattle numbers. South Island -5.8% South Island decreased 5.8 per cent to 9.92 million head, due to drought conditions impacting on winter carrying capacities. Marlborough-Canterbury decreased 9.6 per cent to 3.56 million head. This was due to drought, which was initially across the whole region, having a large impact, particularly in North Canterbury where it continued into winter. Otago-Southland decreased 3.6 per cent to 6.36 million head. This was due to decreased numbers in both Otago (-1.2%) and Southland (-6.0%). In Otago, the most significant decreases were evident on High Country properties, reflecting dry conditions experienced through Central Otago and Queenstown- Lakes Districts during summer. In Southland, changing farming practices have reduced breeding ewe numbers which is most evident on Hill Country Breeding- Finishing properties and Intensive Finishing farms. Hoggets -2.6% The total number of hoggets at 30 June is estimated at 8.95 million, down 2.6 per cent. This is largely due to dry conditions impacting on feed supplies, particularly in East Coast, Marlborough-Canterbury and Otago. North Island +0.7% Northland-Waikato-Bay of Plenty numbers remained unchanged at 1.11 million head. This was due to displacement of stock for new dairy start-ups as a flow-on from conversions in spring 2014, which offset ewe hogget retentions. Ewe hogget retentions lifted due to farmers becoming more cautious about flock rebuilding after the drought and opting to retain hoggets rather than buy in ewes. East Coast numbers decreased 0.5 per cent to 2.56 million head. This was led by a decline in replacement ewe hoggets due to tighter feed supplies from climatic changes. Taranaki-Manawatu increased 4.2 per cent to 1.15 million head. This was due to the combination of decreased ewe hogget retentions being offset by a lift in trade hoggets on-hand. Trade hoggets were held over in anticipation of an improvement in prices occurring late in the season and restricted works space due to effects of plant maintenance and flooding impacts. South Island -6.2% Marlborough-Canterbury decreased 8.3 per cent to 2.05 million head. Drought, which was initially across the whole region has had a large impact, particularly in North Canterbury, where it continued into winter. This contributed towards decreased ewe hogget retentions and trade hoggets on hand. Otago-Southland decreased 3.9 per cent to 2.07 million head. This was due to a decrease in numbers in Otago (-7.5%) offsetting a slight lift in Southland (+0.4%). In Otago, ewe hoggets retained for breeding declined, particularly on Hill Country Breeding-Finishing farms, while other hoggets also decreased, particularly on High Country and Hill Country Breeding farms. This was a reflection of the dry conditions and lower feed levels going into winter. In Southland, ewe hoggets lifted 0.4 per cent to 0.97 million head. This was due to the impact of dairy conversions in spring 2014 coming online, which has contributed to offsetting increases in ewe hogget numbers. 7

8 Outlook for Lambing Ewe condition Compared with 2014, ewe condition is variable between regions. In general, regions where ewe condition at mating was average to above-average included Northland-Waikato-Bay of Plenty, Taranaki-Manawatu and Southland. All remaining regions have largely struggled with tight feed supplies due to unfavourable climatic conditions. All remaining regions were reported to be about the same, or below, the previous year. Concerns for feed challenges and carrying capacities into winter weigh on regions affected by the summer/autumn dry conditions. Lamb crop 5.7% Overall, climatic conditions have contributed towards fewer breeding ewes with variable scanning results compared with the previous season. This is expected to result in a 5.7 per cent decrease in the lamb crop. Northland-Waikato-Bay of Plenty is the only region were early indications point towards higher lambing percentages than last year. However, the overall lamb crop for this region will be moderated by the impact of dairy conversions in spring Early indicators for all remaining regions suggest that lambing percentages will the same as, or down, on the previous year. The hardest hit region Marlborough- Canterbury where drought conditions leading into winter is expected to weigh on lambing performance. A reduced ewe flock and lower lambing performance contribute towards the expectation of a lower lamb crop for spring. After progressive increases in the proportion of lambs derived from ewe hoggets over recent seasons, the percentage of lambs from ewe hoggets peaked at 4.9 per cent in It is forecast to decrease to 4.4 per cent in. TABLE 2 TREND IN SHEEP NUMBERS With 19 million ewes, each one percentage point change in breeding ewe lambing percentage is equivalent to 190,000 lambs. Spring lambing conditions will be a key factor determining the final lamb crop, which will be reviewed in November when Beef + Lamb New Zealand s Lamb Crop is completed. Table 2 shows the trend in breeding ewes and total sheep over the last 10 years. Scanning Results have been variable between regions. Early results from Northland- Waikato-Bay of Plenty indicate improvement on the previous year, with lower empty rates. In contrast, Marlborough-Canterbury results are estimated to be down, with anecdotal results in drought affected areas being down by 25 per cent on the previous year. June Breeding ewes % change sheep % change % % % % % % % % % % % % % % % % % % e % % e estimate Source: Beef + Lamb New Zealand Economic Service, Statistics New Zealand 8 TABLE 3 SHEEP NUMBERS AT 30 JUNE Ewes to Ram Actual 2013 Actual 2014 Estimates % changes on 2014 Hoggets Ewes to Ram Hoggets Northland-Waikato-BoP East Coast Taranaki-Manawatu North Island Marlborough-Canterbury Otago Southland South Island NEW ZEALAND Ewes to Ram Hoggets Ewes to Ram (%) Hoggets (%) (%) Source: Beef + Lamb New Zealand Economic Service, Statistics New Zealand

9 Beef Cattle Beef Cattle New Zealand -2.2% The number of beef cattle decreased 2.2 per cent, or 0.08 million head, to an estimated 3.59 million head for the year ending 30 June. This was predominantly driven by strong prices, with some regions having the added impact of tight feed conditions due to climate. North Island -0.8% North Island decreased slightly (-0.8%) to 2.59 million head at 30 June. This was predominantly driven by decreased numbers on the East Coast in response to a tighter feed situation and opportunities to take advantage of stronger pricing. This region makes up 37 per cent of the North Island cattle herd and the North Island represents 72 per cent of the national herd. Taranaki-Manawatu decreased 1.1 per cent to 455,000. This was moderated by non-breeding and older cattle being carried, which was influenced by strong prices. Northland-Waikato-Bay of Plenty increased 1.3 per cent to 1.17 million head. This was due to a significant shift from breeding herds to finishing cattle, underpinned by a lift in bull purchases. This was driven by strong returns for beef and the need to move towards more flexible farming operations. South Island -5.7% South Island decreased 5.7 per cent to 1.01 million head at 30 June. The primary driver of this was tight feed supplies in response to poor climatic conditions, and stronger beef price signals. The South Island represents 28 per cent of the beef herd. Marlborough-Canterbury decreased 6.1 per cent to 0.62 million head. This was primarily driven by drought conditions in North Canterbury and Marlborough, with farmers also selling livestock to take advantage of the high beef prices. This region represents 61 per cent of the South Island beef herd. Otago decreased 4.3 per cent to 0.23 million head. This was driven by all farm classes except for Hill Country Breeding and Finishing farms where weaners and finishing cattle lifted. In all other farm classes, weaner numbers decreased, which was driven by prices that encouraged sales. Southland decreased 6.2 per cent to 0.16 million head. This was driven by older trading cattle destined for slaughter, aided by poor feed supplies nearing winter and good prices. Hill Country Breeding Finishing farms were the only class on which total beef numbers increased, lifting across all categories. Breeding Cows New Zealand -3.9% Overall, beef breeding cow numbers decreased 3.9 per cent to 0.97 million head at 30 June. This was driven by decreases across all regions except East Coast. North Island -2.3% North Island decreased 2.3 per cent to 0.63 million head at 30 June. This was underpinned by a shift in focus towards finishing stock to take advantage of strong returns to beef. Northland-Waikato-Bay of Plenty decreased 5.7 per cent to 0.25 million head. This was due to farmers shifting their focus to finishing cattle, with some selling down heavily on breeding herds. This region is the most significant for beef production in New Zealand, containing one-third of the beef herd. East Coast lifted 1.9 per cent to 0.28 million head. This was driven by rising two-year heifers, returning breeding cow numbers close to their five-year average. Taranaki-Manawatu decreased 4.6 per cent to 0.10 million head. This was due to poorer calving performance and the lure of better returns from taking on steers and bulls for finishing. South Island -6.8% South Island breeding cows decreased 6.8 per cent to 0.35 million head at 30 June. Marlborough-Canterbury decreased 6.7 per cent to 0.20 million head. Breeding cows and heifers in this region make up 57 per cent of total South Island numbers. Otago-Southland decreased 6.8 per cent to 0.15 million head. Some farmers took advantage of good prices to heavily cull poor performing breeding herds in Otago, while the smaller Southland breeding herd only declined 3.8 per cent. Southland breeding cows only make up 18 per cent of total South Island numbers. Drought conditions and improved returns to beef were strong contributors to the decline in the number of beef breeding cows in the South Island. 9

10 Outlook for Calving Overall, calves weaned for are estimated to be back 6.5 per cent of the previous season. A decrease in the beef breeding herd and an expected softening in the calving percentage overall contribute towards this. Northland-Waikato-Bay of Plenty generally had mild temperatures and good rainfall last spring which provided an ideal environment for cow condition and mating. Pasture covers going into this spring bode well for good calving and calf survival. In East Coast the number of breeding cows and heifers mated increased. Region numbers will be moderated by the number of cows scanned empty, which was estimated at around 10 per cent. Taranaki-Manawatu had similar pregnancy testing results to last year with 8-10 per cent empty rates being reported. Breeding cows were in good condition, yet faced some challenging hill country feed situations moving into winter, especially in Taihape. Marlborough-Canterbury calving is leaning towards a poorer result than average with cow condition going into spring being variable and current feed conditions being very tight across the region. In Otago, the number of calves born will be affected by lower numbers of breeding cows being empty when they were pregnancy tested. Southland is likely to be down due to lower numbers of breeding cows, which offsets calving percentage which is expected to be similar to previous years. TABLE 4 BEEF CATTLE TREND June Breeding cows % change beef cattle % change % % % % % % % % % % % % % % % % % % e % % e estimate Source: Beef + Lamb New Zealand Economic Service, Statistics New Zealand Table 4 shows the trend in beef breeding cows and total beef cattle over the last 10 years. TABLE 5 BEEF CATTLE NUMBERS AT 30 JUNE Breeding Cows/ Heifers Actual 2013 Actual 2014 Estimates % changes on 2014 Weaners Beef Breeding Cows/ Heifers Weaners Beef Breeding Cows/ Heifers Weaners Beef Breeding Cows/ Heifers (%) Weaners (%) Northland-Waikato-BoP East Coast Taranaki-Manawatu North Island Marlborough-Canterbury Otago Southland South Island NEW ZEALAND Beef (%) 10 Source: Beef + Lamb New Zealand Economic Service, Statistics New Zealand

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