Beef + Lamb New Zealand's (B+LNZ) Economic Service says the signals are there that the sheep flock is stabilising following three consecutive years of dramatic decline.
Dairy farm profitability improved strongly in 2009/10 compared to 2008/09
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Drought conditions will impact 2010/2011 dairy production
Federated Farmers is encouraging dairy farmers to make provisions for recovery plans, as the effects of drought in the upper North Island and parts of the South Island may be felt for several seasons.
"Experience tells us that it can take several seasons before our full productive potential is resumed, so planning for pasture renewal and cow condition recovery is important," says Lachlan McKenzie, Federated Farmers Dairy chairperson.
"Some 40 percent of New Zealand's dairy herds are now in drought declared zones. Yet if we add in regions like the Bay of Plenty and Otago, which have been affected by soil moisture deficits, then we're pushing close to half of New Zealand's dairy herd.
"Daily milk production out of Northland is down about 29 percent but the previous season was pretty poor. In the South Auckland region, which includes the Waikato, daily production is down around 6.5 percent. In the Bay of Plenty, it's down 3.1 percent.
"But since the North Island accounts for around two-thirds of New Zealand's total milk production, we're looking at a reduction in milk volumes by upwards of two percent. This means the 2010/2011 season will be one of recovery.
"Drought means we'll be under performing our potential but given the annualised rainfall New Zealand has, you have to ask why we have the word in our vocabulary.
"With no national plan for water storage, it's costing New Zealand hundreds of millions of dollars in lost exports. It sounds basic biology really, but for the pasture that underpins our economy to prosper, we need heat, sunshine hours and soil moisture.
"The cost of this vital moisture component will be measured in reduced dairy output for this season and potentially rolling into the next two," Mr McKenzie concluded
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