Subsidies shape silly responses

The ag-sag of the 80s was tough, but let’s not forget the silly subsidies that led to it.

Sheep numbers peaked at  70 million in 1982 which was around 22 sheep for every person.

We’re down to only six sheep each now, but farmers have replaced quantity with quality.

The total number of sheep was down by just over 5 percent between June 2015 and June 2016, Statistics New Zealand said today. Provisional figures show that the number of sheep in New Zealand fell by 1.5 million, down to 27.6 million at 30 June 2016.

“Between 2006 and 2016 the number of sheep reduced from just over 40 million, a drop of around 30 percent,” agricultural production statistics manager Stuart Pitts said. . . 

Improvements in breeding and feeding are producing better stock and the amount of meat we’re selling is stable in spite of the fall in sheep numbers.

Returns from sheep meat continue to disappoint but the answer isn’t subsidies.

As the video shows, expensive subsidies shaped silly responses. Farmers went for quantity rather than quality and produced meat for which there was no market.

The video is one of a series of  short videos, Trailblazers: The New Zealand Story from Free to Choose Media.

The others are:

Main preview

Public Sector Reforms

Empowering Ordinary People

Fishing Reforms and Sustainability

Hat tip: Utopia

 

 

 

 

Baad driver feeling sheepish

Road spikes are often used to stop fleeing drivers, but today a car being chased by police found its way barred (baaad?) by sheep:

A Queenstown police officer’s flock of sheep joined the line of duty on Friday morning.

The sheep were being moved along Littles Rd when they became the road block finishing a 90 minute police car chase through Central Otago and Queenstown.

Senior Sergeant Paula Enoka, of Queenstown, said the mob belonged to a local officer and happened to be in the right place at the right time.

They were being moved by a farm worker, who appeared unfazed by the scene unfolding behind him and carried on with the job. 

None of the sheep, or working dogs, were injured as the car came to a halt before attempting to drive through the flock. . . .

The baaad driver and passengers are no doubt feeling sheepish.

Ewe’d have to see it to believe it.

 

Baa-rnstorming the Lourve

Visitors to the Louvre got more than they baa-rgained for yesterday:

It was more je ne sais baa than quoi at the Louvre museum this morning as a flock of sheep and their farmers stormed the Paris landmark.

The protesters were from the Farmers’ Federation, who carried banners reading “PAC’astrophe” in reference to the European Union’s Common Agricultural Policy, which is under reform.

They were objecting to the effects of the industrialisation of agriculture, saying they feared for farmers’ jobs. . . .

Change is difficult but necessary.

We can be grateful that difficult as it was at the time, being thrust into the real world in the 1980s has made agriculture in New Zealand stronger.

Without those changes New Zealand would not be leading the developed world in economic growth nor would we be able to afford so much of the imports and social services which depend on export income.

 

Lamb drop 2m down because of drought

The impact of last season’s drought in the North Island has taken a siginifcant toll on stock numbers.

Last season’s North Island drought has dented New Zealand’s sheep and cattle numbers and this spring’s lamb crop is expected to be 2 million lambs less – down 7.7 per cent to 24.43 million head.

The Beef + Lamb New Zealand (B+LNZ) Economic Service annual stock number survey confirms what many predicted, following the recent prolonged and extensive drought. The survey provides the country’s sheep and beef sector with a prediction of the productive base of livestock for the 2013-14 season.

While both sheep and cattle numbers fell – 1 per cent and 1.3 per cent respectively – it is the lamb crop that reflects the drought’s impact most significantly.

The export lamb slaughter for 2013-14 is expected to be 18.6 million head, a decrease of 8.5 per cent and the export cattle slaughter is forecast to decrease 2.7 per cent to 2.2 million head in 2013-14.

This will have a big impact on the meat industry and also on other businesses which service and supply farms including shearers and stock firms.

B+LNZ Economic Service Chief Economist, Andrew Burtt says the drought conditions affected ewe condition at mating and, consequently, scanning results were variable across the North Island.

“We’re expecting lambing percentages to be down by up to 20 percentage points in the regions worst hit by drought in the north. The South Island fared better and scanning results were down only a few percentage points – and that’s against last season, which was favourable in the south.”

Overall, sheep numbers were down 1 per cent to 30.94 million head at 30 June 2013, compared to 31.26 million a year earlier.

Mr Burtt says breeding ewe numbers were also down 1 per cent overall, but the numbers in each island moved in opposite directions. “Ewe numbers in the North Island decreased by 2.7 per cent to 9.52 million, while South Island ewe numbers were almost static (+0.5%) at 10.69 million.

“Hogget numbers reflected a similar pattern – back 1.3 per cent overall, but down 3.5 per cent in the north and up 1 per cent in the south.”

Meanwhile, cattle numbers fell 1.3 per cent to 3.69 million head at 30 June 2013, from 3.73 million in 2012. “Again, the North Island figures tell the drought story, with numbers back 2.5 per cent – with particularly large decreases in East Coast and Taranaki-Manawatu – while the South Island’s cattle numbers rose 1.8 per cent.”

The full report is at Beef + Lamb’s website.

Nokia vs sheep

Gerry Brownlee’s response to David Shearer’s desire to emulate Finland has caused a bit of a stir.

As is usual in such stoushes, emotion beats facts, but  Federated Farmers has the numbers to prove sheep beat Nokia:

Federated Farmers‏@FedFarmers

@ChrisKeall ‘More money selling a Nokia than a couple of sheep’? Nokia lost €954m in Q4 and sales were down 31%. C/W http://www.stats.govt.nz/browse_for_stats/industry_sectors/imports_and_exports/OverseasMerchandiseTrade_HOTPFeb12.aspx

Hat tip: Offsetting Behaviour

By-products boom boosts sheep prices

When sheep prices were in the doldrums most of the fingers were pointed at the meat industry.

But meat is only part of the value of sheep and lambs. Until the last couple of seasons it wasn’t just meat prices but returns for by-products like wool, pelts, lanolin which were also low.

In the last couple of years returns from sheep and lambs has been much better, partly because of the increased demand and consequently price of meat but also because of higher demand and prices for the by-products.

Among those is lanolin, the price of which has doubled  as sheep numbers have dropped.

New Zealand Wool Services International (WSI) – one of the country’s  two scour operators – says prices for that product have almost doubled
in the past two years.

WSI chairman Derek Kirke says like wool, the price surge has been  driven by a world supply shortage, due to the drop in sheep numbers.

Tailing hasn’t finished yet but early indications are this year’s lamb tally will be well up on last season’s which was hit by big losses after the September snow.

Not all of those will be sold this season, if feed supply allows it, farmers will hold some stock back to rebuild flocks.

Demand is still expected to remain high although there will be a ceiling to the price.

Lamb is already out of reach of the budget conscious and there will consumer resistance from those with more disposable income if the price gets too much higher.

Will the good prices last?

Last season was the best in a generation for farmers, but there is reasonable confidence that bust won’t follow the boom.

Prices aren’t likely to stay at this year’s highs but Alliance Group expects protein markets to stay strong:

Speaking in Oamaru during the company’s annual series of shareholder/supplier meetings, chief executive Grant Cuff said it was expected 2012 prices to shareholders would remain high for lamb, sheep, cattle and deer.

Indicative pricing was that lamb would remain at $100 plus and sheep at $85 plus, with cattle prices down slightly.

Sheep and beef numbers were stable worldwide, consumption of meat was increasing and there were growing sales in the East.

Uncertainty in Britain, Europe and the USA is concerning but our two most important trading partners, Australia and China, are more stronger.

A free trade deal with India would provide more opportunities.

One of the benefits of new markets in Asia is that they are interested in the cheaper cuts which aren’t popular in our traditional markets.