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How will the number of sheep farms transforming to dairy affect the industry?

New Zealand is a nation famous for its sheep population. According to Statistics New Zealand, there were 31.1 million roaming the fields of our two islands in 2011, which seems a huge number. However, the truth is, our country's flocks are quite a bit smaller than they used to be, with some 70.3 million sheep counted back in 1982, a peak year.

Now, numbers have fallen yet further – there are less than 30 million sheep on our farms for the first time since 1943. Conversely, numbers of cattle have steadily risen, with just shy of 6.7 million cows wandering the land in June 2014, an increase of 3 per cent over the year previous.

From beef to butter

Why are the numbers of Aotearoa's livestock see-sawing in this way? It could feasibly be down to the fact that more and more sheep and beef farmers are transforming their land into dairy farming operations, which could have a significant impact on New Zealand's farming industry as a whole.

There are approximately 29,200 sheep and beef farms scattered across the North and South Island, with around 11,400 dairy farms. However, the former number is falling, with the latter rising. This notable trend has meant that fewer lamb are being slaughtered each month, according to Meat and Livestock Australia (MLA), who also over the New Zealand industry.

There are approximately 29,200 sheep and beef farms scattered across the North and South Island, with around 11,400 dairy farms.

The lower occurrences of lamb slaughter means that they have now fallen below five-year average levels, adversely affecting prices and adding pressure to the sheep industry, according to MLA.

"The solid supply of lambs still coming forward before the production season winds down during winter placed pressure on exporters during the month, at a time when subdued global demand made it difficult to shift product and maintain prices," noted the MLA.

Sheep to stabilise?

This has ensured that trading conditions were highly challenging throughout autumn, but it looks as though the sheep market could plateau in the coming weeks, The Sheep Site reports.

Another factor that could help New Zealand's sheep industry is the fact that the NZ dollar is currently enduring a torrid time of it. On June 23, it plummeted to its lowest levels in five years, trading for just US$0.68. This fall, also occurring against the British pound and the Euro, means that the weak New Zealand dollar will help prop up export returns as the lambing season draws to a close.  

Level of New Zealand cattle are rising, but sheep numbers are falling.