Low Cost Pasture Based Meat ProductionWednesday, Jun 20, 2001
It is pleasing to see that this year has been the best in forty years for sheep and beef farmers. But
even more significant is the steadily rising trend in prices per head over the past ten years.
The strength of the sheep and beef industry has been its success in maintaining a low-cost structure
inside the farm gate and the processing industries ability to improve value in the market. Both are
undertakings that have involved cycles of considerable frustration pain, failure and restructure
for more than twenty years.
It seems along time ago since Rural Bank officers felt moved to state that Gisborne hill country was
forty percent over valued and that they would adjust there lending accordingly. Setting in motion
a ripple that removed farmer’s equity and put livestock farming on hill country in a long holding
pattern that with this seasons influence may be thankfully coming to an end.
Reports of King Country sheep and beef finishing unit values lifting from $250 to $320 per stock unit
is presenting a new set of choices to farmers in how they approach the future of their farm business
at a time of increased returns and increased equity.
Whether by design or good management, sheep and beef producers have avoided the malaise that may eventually
knobble dairy producers – that of over investment in facilities and depreciating equipment
and labour to manage livestock at higher intensity on increasing quantities of bought in or
grazed off feed.
Finally a property is valued by the cost and seasonality of the production of its limiting output –
energy – generally in the form of consumable pasture dry matter or mega joules of ME.
produced per hectare.
Perhaps the current lift per stock unit in land values is an indication that this relationship is well
understood and a solid potential for improved returns on investment lies ahead for those who have
mastered low cost pasture based meat production.