New Zealand’s export lamb kill continues to plummet as poor returns from sheep farming and the attraction of alternative land uses take their toll.


Beef & Lamb NZ (BLNZ) Economic Service last week slashed its estimate for the 2009-10 crop to 21.5 million, a 4.5% drop from 2008-09.


Meat companies say the dive comes as no surprise, with Silver Fern Farms chief executive Keith Cooper saying he believes the actual figure to be closer to 21m.


“At that level and on the basis that nothing is on the horizon that will see a shift upwards in numbers then processors will need to adjust models to these new levels of lamb availability as we have done over the past two seasons,” he told Rural News.


The low numbers must also encourage processors/marketers to focus more on improved market returns rather than relying on throughput efficiencies, he believes.


Alliance chief executive Grant Cuff says what it will mean for industry processing capacity will depend on how each company handles the change in kill.


“We’re okay, thank you.”


Federated Farmers meat and fibre chairman Bruce Wills also says the drop is no surprise, but it is very concerning.


“They are alarming figures as a sheep farmer.
“But the sad reality is that until we get profitability back behind the farmgate those numbers will continue to decline.”


The disconnect between high in-market prices driven by strong consumer demand and producer returns is “an absolute tragedy”, he adds.
Wills lists three points he believes are key to turning the tide: keeping on-farm inflation down; industry rationalisation; and revitalisation of wool returns.


“We can’t have a sustainable sheep industry based on meat alone.”


Meat industry reform is essential to present a strong marketing position to powerful supermarkets, and achieve efficiencies in processing, from R&D through to logistics.


“There is massive overcapacity at present and that comes at a cost to the whole industry.”


He hopes a joint BLNZ and Meat Industry Association-commissioned study by Deloitte will provide some answers later in the year. Farmers need to be smarter too, using new forages to boost production per hectare and reduce the impact of droughts.