Phil Smith, B+LNZ's Farmer Director for the Northern South Island, reflects on how farmers in other parts of the world operate.
It is always interesting to see how farmers in other parts of the world operate.
On a recent trip to the US I gained some insight into their sheep industry and although the numbers are small – the US flock totalling 5.4 million – they grow them big.
We saw lamb carcases of 30-45kg (these animals still had their milk teeth) which highlights the weight-gaining power of feedlots.
Most of the processors we visited preferred lamb carcases of 60-80lb (27kg-36kg) as these were seen as the most versatile. At a value of US$2.50/lb, lamb prices are at an all-time high in the US and many believe they have peaked and will begin to ease from December.
While a number of lambs are grown out on feedlots, many of sheep-producing states such as Utah and Colorado run their sheep on extensive, government-leased rangeland.
These large flocks are looked after by Peruvian shepherds and their dogs who are with their sheep 24 hours a day, seven days a week. While all their living expenses are paid for, these shepherds are paid $1500/month and this will fall foul of new minimum wage regulations. Some predict that these regulations will spell the end of these sheep farming systems.
Predators are another challenge these farmers face and an estimated 275,000 sheep a year are killed by predators such as Coyotes, Wolves and Mountain Lions. To help protect sheep, Great Pyreness dogs guard their flocks’ day and night.
While wild animals enjoy the taste of lamb, the people are a bit more reticent. Around one-third of Americans have never tried lamb, and those that do eat it typically only eat it in restaurants or for special occasions.
There are however new trends emerging, driven by the millennial generation’s willingness to try different foods, particularly ethnic-style street food.
This is reflected in the way lamb is processed in the US, up to 50 per cent of the carcase going through the mincer. Lamb burgers are becoming a feature on many restaurant menus.
I was in the US with the Tri-Lamb Group which is a collaborative initiative between lamb producer organisations, (including Beef+ Lamb New Zealand) from the United States, Australia and New Zealand.
It aims to enhance the profitability and sustainability of the lamb market in the United States.
Back home, lamb prices this season are expected to reflect the world-wide shortage of sheep meat and farmers can expect a much-needed average of $6-plus/kg.
Locally, we are seeing some great work happening to increase the efficiency of our irrigation schemes.
The Amuri Irrigation Company, with its shareholder farmers, has invested more than $80 million in piping the open irrigation canals of both the Balmoral and Waiau irrigation schemes.
This will mean the end of inefficient border dyke irrigation. The piped canals will mean no wipe-off water from border dykes which will greatly enhance water quality in the Hurunui and Waiau rivers.
I am also seeing a lot of good work with farmers fencing off and planting waterways in the basin.
The Labour Party’s proposed water tax is a real concern, especially as it could force farmers to intensify just to be able to pay it.
On our farm, this tax would cost us $30,000 per annum. To pay this we would need to generate an extra $60,000 per annum to compensate (taking into account 50% expenses). This means we would need to intensify our operation or convert to dairy farming on our irrigated area to make it viable.
Is this what the Labour Party really wants? As the American billboards say “No Farms No Food.”