Continued pressure on sheep
numbers from alternative land uses is not expected to abate,
despite improved forecasts for lamb prices.
Sheep numbers continue to fall, with a 3.2% decrease over the
2013-14 season to 29.8 million in the year to June.
Long-term forecasts for farm-gate prices around the $100-$110
per-head mark would likely see some rebuilding of stock
rates, ANZ's latest Agri Focus said.
While the switch to dairying might slow as environmental
policies held back land-use change, forestry opportunities
were likely to continue to reduce the area of hill country
farmed, the bank's economists said.
More irrigation schemes would support alternative land uses
and dairy support opportunities continued to grow as farm
systems became more intensive.
Lamb prices have recovered by 8% in 2013-14 and would average
around $95 per head for a 17.5kg carcass.
In 2014-15, those gains were expected to be held on to and
show incremental improvement towards $100 per head, the
More traditional markets in Europe and North America were
seemingly showing some recovery and there was continued
growth in demand from developing regions, notably China and
the Middle East.
China continued to be the ''truly stand-out'' market.
Volumes were still growing and demand was evolving.
Latest import figures showed little sign of the growth even
Year-to-date Chinese imports of sheepmeat were 150,600
tonnes, an increase of 50% on the same period in 2013 and
more than three times the volume imported in the
corresponding period of 2012.
Breeding ewe numbers in Otago-Southland declined 3.4%, the
majority of the change occurring in Southland (down 5.6%),
Beef and Lamb New Zealand's Economic Service annual stock
While beef cattle numbers nationally increased for the first
time since 2006-07, up 1.6% to 3.76 million, they decreased
in Otago and Southland by 3.2% and 3.4% respectively.
Confidence remained high that there would be decent farm-gate
returns for prime cattle in 2014-15, driven by both supply
and demand factors, ANZ said.