Sheep numbers are lowest since 1935 but exports still buoyant

The declining national flock was related to pastoral land being switched from sheep and beef to dairy production.

National sheep numbers are the lowest since 1935 after falling below 30 million but the industry still accounts for 9.2 per cent of the country's exports, figures show.

Beef & Lamb New Zealand agricultural market analyst Adrienne Egger said its data showed the national sheep numbers had plummeted but, in the year ended March 2015, exports totalled $4.3 billion and contributed to 9.2 per cent of merchandise exports.

The declining national flock was related to pastoral land being switched from sheep and beef to dairy production, extensive marginal pasture lands closed for conservation plus urban encroachment from smallholding lifestyle blocks near main cities and the development of viticulture and horticulture, she said.

That did not bode well for sheep numbers which were predicted to stay about the same.

"For the years to come, we are expecting the sheep flock to stabilise at just under 30 million head."

However, Ms Egger said significant production gains had been made through the decades despite the drop.

Lamb production per breeding ewe jumped from 9.8kg per head to 18.6kg per head from 1990/1991 to 2014/15.

Lamb slaughter weights today were 27 per cent heavier at 18.2kg per carcase compared with 14.4kg in 1990/91 while mutton slaughter weights increased by 23 per cent over the same period to 25.2kg per carcase.

Lamb prices at the farm-gate increased by 85 per cent in real terms while mutton prices more than doubled between 1990/91 and 2014/15. Overall, prices received by sheep and beef farmers in New Zealand increased by 122 per cent between 1990-91 and 2014/15 while prices paid for inputs rose 55 per cent.

Traditionally China had been a market for low value cuts but times had changed.

"More recently higher value cuts are beginning to feature, reflecting new product mix growth opportunities."

Last season, it was the largest single country market by volume of lamb accounting for 31 per cent of the tonnage, behind the UK's 19 per cent.

Meanwhile, the UK remained the single largest country market by value and was split on a tonnage basis between 50 per cent high value chilled product and 50 per cent frozen product.

Ms Egger said the US was focused on high value cuts such as lamb racks.

Lamb exports to the US accounted for 9 per cent of exports by volume Federated Farmers Meat and Fibre chairman Rick Powdrell said the productivity story was a great one however the season had ended on a disappointing note. "At the moment, farmers are not making a lot of money when you compare the cost of production with prices. There is not the margin there that we need."