Prime Movers report: Moving on from the numbers game

By BRIAN LYNCH

Statistics New Zealand's release last month of provisional agricultural census figures confirmed what every livestock farmer, rural transport operator, stock and station agent, wool buyer and meat company employee already knew: there has been a dramatic decline over recent years in our sheep population.

It doesn't seem that long ago, a mere two decades, that the country was home to more than 70 million sheep, or nearly 25 for every person, and visitors saw us as one large animal farm.

The results of the first comprehensive headcount in eight years paint a different picture. The national sheep flock has been cut to 39 million: that's a drop of 10 million in the sheep population since the last full census in 1994.

Do we face a huge downsizing of the industry as has happened in some other countries with long sheep-farming traditions, such as Britain and France? The short answer is an emphatic no - but a 45 per cent drop over 20 years in the raw material base of the meat-processing industry certainly raises some hard questions. Is that reduction rate likely to go on? Do we have a large enough resource to sustain the livelihoods of the 120,000 or so people who directly or indirectly depend on the industry? Would it be sufficient to support a substantial New Zealand sheepmeat presence continuing in the offshore markets that deliver the best returns?

Positive answers to those questions would be harder to find if other features of the industry had remained static while stock numbers fell away. But there has been a significant lift in productivity on farms and in meat plants that has largely offset the decline in the animal population.

Meat and Wool Innovation Economic Service figures show that total lamb and mutton production today on a bone-in basis is higher than it was at the last agricultural census when there were 26 per cent more sheep.

For this, we have to credit the successful transformation that has occurred in the lamb industry through the past decade.

When the lamb population peaked in the mid-80s at 52.8 million, the average lambing - or lambs born per ewe - was 103 per cent; today it's nearer 124 per cent. In that time the average export lamb carcass weight has grown from under 13kg to almost 17kg.

When the last census was taken the average per head export price for lamb paid to farmers was $36 inflation-adjusted, last year it averaged $70. The average export value for lamb in 1994 was $3600 per tonne, last year it was $7000 (for mutton the comparative figures are $2500 and $5900).

Even allowing for the ebb and flow in the strength of our dollar against other currencies, those gains are impressive.

There are other encouraging indicators as well. In 1990 the traditional frozen carcass made up 40 per cent of the export lamb trade. This year 96 per cent of the trade will be in further processed form, made up of added-value cuts ready on delivery for display on supermarket shelves. In 1990 the volume of premium chilled lamb product exported was under 7000 tonnes; this year the estimate is six times that amount.

Meat companies have driven that degree of change because they have the guarantee of long-term access to major markets. That was the most significant outcome for the industry from the last round of trade negotiations that ended in 1994.

It's allowed the industry to shift from a highly seasonal focus to being a year-round food business. It's encouraged companies and farmers to form partnerships that give processors confidence their stock procurement needs will be met, so that commitments to importers abroad can be filled.

That recital of good things done does not diminish the significance of what the latest census figures reveal. It's obvious the fall-off in sheep numbers was faster than expected. For the past few years it had been assumed the flock total had stabilised at around 44 million. The figures unveiled by the census show the stark lesson to be learned for a country so reliant on its rural economy if it does not have regular and frequent updating of its core database.

Meat companies depend on reliable livestock statistics to assess the strength of the catchment areas surrounding their processing plants. Key providers of services to the industry - such as ports, shipping companies and packaging firms - need to know the volumes they will handle. With a new round of world trade negotiations now entering the heavy traffic where the makings of possible deals will begin to emerge, our Government officials need credible data on hand to enable them, with the industry, to evaluate the merits of different options for expanding access to important overseas markets. It's a relief to know that the agencies which assemble these critical statistics have made a commitment to do so more often in future.

* Statistics New Zealand's preliminary results also show a decrease in beef cattle numbers, down 11 per cent from 5 million in 1994 to 4.5 million last year.

However, dairy cattle numbers increased 39 per cent, from 3.8 million in 1994 to 5.3 million last June, continuing an upward trend since 1991.

The figures also confirmed the rapid growth of wine-grape growing. Between 2000 and 2002, the area planted in wine grapes increased by 37 per cent from 12,700ha to 17,400ha. More land is now being used for growing wine grapes than for any other type of fruit, including kiwifruit (12,200ha) and apples (11,600ha).

The census also shows that the area planted in avocados has more than doubled to 3100ha in eight years.

Last year, 51,100ha of wheat were sown, up 14 per cent on the 1994 figure, and 76,000ha of barley, a 1 per cent drop since 1994.

During the year 10,800ha of potatoes were harvested, 14 per cent more than the 1994 figure.

An estimated 5500ha of onions were harvested during the year ended June 30, 2002, down 21 per cent on the figure recorded in the 2000 Horticultural Survey.

For the first time Statistics New Zealand recorded data on olive plantings, finding the fledgling sector had 2600ha last June.

Facts:

Export value: $19.8 billion

Percentage of total exports: 60 per cent

Number of farms: 80,000

Farm and orchard area: 11.8 million ha

Plantation forests: 1.7 million ha

Fishing exclusive economic zone: 2.2 million ha