The number of dairy cattle in New Zealand has fallen for the first time in about a decade, according to the 2015 Agricultural Production Survey.     Statistics New Zealand says the number of dairy cattle fell to 6.5 million in 2015, which was the first decline after nine years of consecutive increases.     Sheep numbers have continued to decline and there is now just over six sheep for every New Zealander, down from 13 sheep per person 20 years ago.   The survey is based on responses from farmers and foresters for the 12 months ended June last year, and it shows the number of dairy cattle has fallen as dairy farmers have slaughtered cows because of the slump in dairy prices.    The national dairy herd hit a record high of 6.7 million in 2014.     The biggest fall in animal numbers is in the Waikato dairy heartland where there were 153,000 fewer dairy cattle than in 2014, while Taranaki dairy cattle numbers were down by 8 percent and in Canterbury it was 6 percent lower.    The survey also shows that sheep numbers fell by 2 percent to just over 29 million sheep.    The number of beef cattle was marginally lower at 3.5 million and deer numbers dropped 6 percent to 900,000.

Debt in the sector remains significant concern for Reserve Bank after cuts to milk price.    The Reserve Bank put total dairy debt at almost $38 billion in June last year and that debt remains near the top of RBNZ’s  list of the threats to the economy.    Bank lending to the dairy sector has increased by more than 9 per cent in the year to March and is expected to rise further as troubled farms borrow to meet working capital requirements, which suggests it is now past $40 billion.   In its latest Financial Stability Report the continuing downturn still falls within models the Reserve Bank ran last year  which showed the banks should be strong enough to withstand this downturn .  The Reserve Bank  says  analysts are forecasting  that payouts in the 2016-2017 season will remain below break-even and the Financial Stability Report  says if the banks begin to take a more pessimistic view of the sector they may force a larger number of troubled farms to be sold, which would put further downward pressure on farm values, particularly as sales volumes are low.

The continuing dry over summer and autumn is causing increasing concern for Hawke’s Bay, according to the Ministry for Primary Industries.     MPI says dry conditions headed north from eastern areas south of Napier during April, and this was hampering pasture growth.     Pasture growth at this time of the year is important for building up pasture covers to carry farms through winter and early spring and despite reduced feed demand due to less dairy grazing and earlier-than-usual destocking, pasture covers were falling on many sheep and beef farms.      Dairy farmers in the generally better off western areas of the region would also welcome rain.     Hawke’s Bay Regional Council senior scientist for climate and air Kathleen Kozyniak says Hawkes Bay averaged less than half of the normal April rainfall across the region and the southern coastal area had less than half that again.     She says river flows are all below normal, groundwater levels are near to below normal, and soil moisture, particularly in the south of the region, is on a “steady downward trajectory”.   Daytime temperatures are again hotter than usual, leaving some spending their evenings admiring their perfectly stacked woodpile rather than a captivating flame.

New forecasts from the UK sheep industry continue to signal an increase in UK lamb supply this year. The increase is not as great as previously expected, however, due to high losses at lambing and more favourable export conditions for the UK. There is also expectation for higher numbers of ewe lambs to be retained, which will impact slaughter rates. The forecasts pick the majority of UK production to come forward in the final quarter of 2016, with slaughterings through this period expected to be higher than last year. Hopefully higher exports through this period will relieve some of the supply pressure, however, analysts are not picking that exports will completely offset the higher production.    The UK market has failed to gain momentum this year, following the over supply of lamb from last season. Increasing consumer demand is needed to prevent a similar situation occurring this year.   Working against increased consumption of imported product, however, is growing pressure for supermarkets to only market domestic product.

Weaner cattle made up 65% of the yarding at Frankton  and a good lead up to winter has meant that there are plenty of buyers looking for cattle to carry through.   The weaner heifer section comprised some quality lines with Ang/Hx cross, 213-245kg, making $710-$780, while one line of 4 Here x made $920.    All bar one line of Here/Freis x steers sold well over $4/kg, with 150-190kg averaging $4.10/kg and lighter lines up to $4.76/kg.  A big offering of Friesian bulls also sold to good demand at $455-$590, though the 200kg indicator price eased to $3.01/kg.  Vetted In Calf  beef cows sold for $980-1180 at $2.03-$2.30/kg, while Here/Frx R2 heifers, 274-295kg, sold for $850-$920 at $3.10-$3.12/kg. Good beef heifers were mainly making $2.70-$2.91/kg. Prime cattle prices eased to $2.71-$2.73/kg for the higher yielding lines, though most of the offering sold for $2.60-$2.67/kg. Good exotic heifers sold on a steady market at $2.60- $2.70/kg, while Beef/Frx made $2.61-$2.69/kg, and Friesian $2.10-$2.20/kg.     A bigger offering of ewes featured a line that was run with ram and sold for $79. The rest of the offering was of good quality with most selling for $75-$93, though a lighter line made $31. Lamb prices eased for both prime and store, with primes making $90-$104, and store lambs $15-$75