Australia and New Zealand have been the big sheep meat exporters of the second half of the 20th century, with New Zealand punching above its weight due to a flock focussed on prime lamb production. With changes in farm policy in the 1980s and subsequent competition from other enterprises, the New Zealand flock has had a shrinking trend for the past four decades which continues. With this in mind the article takes a look at the latest sheep and lamb slaughter numbers from New Zealand.
Mecardo looked at the sheep and lamb offtake in eastern and Western Australia in late November. Using the same methodology, Figure 1 shows the New Zealand adult sheep offtake for the past forty years, along with the New Zealand flock size. The shaded areas are periods when the adult offtake was below 12%, generally corresponding with increases or at least a stabilisation in the flock size. In 2020 when Mecardo last looked at the New Zealand sheep offtake the comment was made that due to a pullback in dairy prices, the flock looked to be stabilising around 27 million head. As Figure 1 shows the sheep offtake has remained well above 12% since then and the flock is now close to 23 million. At this stage, the offtake is still flagging a shrinking trend.
Figure 2 repeats the exercise with lamb data. The lamb offtake rose from 40-50% in the late 1980s, to reach 68% to 72% during the past decade.
Figure 3 shows the effect of a smaller flock, somewhat offset by a higher lamb offtake, on the New Zealand sheep meat production. The schematic compares Australian and New Zealand sheep meat production (calendar year with estimates for 2024 included) from 1990 onwards. In past decades New Zealand sheep meat production has been 80-90% of the Australian volume, with this ratio falling to around 50% in recent years. The current Australian production level looks high in terms of being sustainable, given the extraordinary Western Australian offtake levels and an expected shrinking of the eastern flock. Smaller New Zealand volumes will help support sheep meat prices on the international market which will flow back into the Australian market. The one downside of this, as noted in 2020, is that an industry cannot shrink itself into prosperity.
What does it mean?
Sheep numbers are under downward pressure in many regions internationally (Western Australia, eastern Australia to a degree, New Zealand, Mongolia and the UK). From a sheep meat price perspective this is a positive as sheep meat prices have a strong negative correlation to production in the major exporting and importing nations.
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Key Points
- The downward trend in the New Zealand flock continues, with current sheep offtake levels consistent with a continuation of this trend.
- New Zealand sheep meat production also has a shrinking trend, with New Zealand production now around half of the Australian production, down from 80-90% in previous decades.
- Lower production of New Zealand sheep meat will help support prices in the international market which in turn will help the domestic Australian market.
Click on figure to expand
Click on figure to expand
Data sources: Statistics of NZ, Beef+Lamb NZ, ICS