New Zealand's ratio of sheep to people lowest in over 150 years

The latest data from Stats NZ shows that as of 30 June 2022, the New Zealand national flock stood at 25.3 million sheep. This was 2% lower than the year before and continues the long-term contraction of the national flock.

Since 2002, the NZ national flock has shrunk by 14.2 million head (or -36%). This puts the ratio of sheep to people below 5:1 for the first time since records began in the 1850's, according to Stats NZ. For context, in the 1980's the ratio peaked at around 22:1.

Several factors have contributed to this decline; perhaps the removal of farm subsidy in the 1980's being the most instrumental. More recently sheep numbers have been pressured by factors including lower global wool prices, adverse weather and increased tree-planting for carbon-offsetting schemes.

Even though New Zealand's sheep numbers have declined, the volume of sheep meat exported has remained relatively stable. Over the last 10 years for example, the national flock has contracted by 19%, while exports have fluctuated around 400,000 tonnes (+7% between 2012-2022), demonstrating an increase in productivity.

What's the outlook for NZ lamb?

Beef & Lamb New Zealand forecast that declining ewe numbers will have contributed to the 2022-23 lamb crop shrinking by 8.5% from the previous season. Exports of sheep meat therefore were expected to decline.

Since October however (the start of New Zealand's export season), sheep meat export volumes have grown slightly year-on-year (+3%). Market reports suggest that exporters have not been prioritising the UK due to lower returns - likely influenced by weaker domestic demand - and instead focussing elsewhere, namely China. This is borne out in export figures; the quantity of sheep meat shipped to China is up 17% for the season-to-date, while UK-bound exports have fallen by 37%.

Despite a positive start to the season overall, there could be some downward pressure approaching New Zealand export volumes. China's foodservice market is sluggishly recovering from COVID lockdowns (lifted earlier in the year), and the upcoming summer period is a time where lamb falls out of favour with Chinese consumers. At the same time, we're now entering the UK's new season production period, meaning supply increases for the remainder of the year. New Zealand's slaughter levels look to remain lower for the rest of the year, which could further restrict exports.