In spite of touted government plans to limit forestry on sheep and beef land and although the rate of forestry conversions has slowed due to policy uncertainty, the livestock population, particularly sheep, appears to be heading irrevocably downwards. At 23 million there are now just one third the number of sheep compared with the peak in the 1970s.
The sector has worked wonders in increasing the value of the flock through better lambing rates, heavier lambs, and higher product returns in spite of the collapsing wool price. But a combination of sluggish world markets and agriculture’s position as public enemy number one in the generation of greenhouse gases and harm to the environment risks putting New Zealand’s best-known export under existential threat. The reality is that sheep are now in danger of no longer being reared in sufficient numbers to retain a critical mass.
Four research programmes funded by the Our Land and Water Science Challenge initiated under the last National government have all reached a common conclusion: the best and easiest way to meet our 2050 goals of reducing GHGs and improving water quality is to convert half of all sheep and beef farms progressively to pine forests. This could be achieved with an annual conversion rate of 2.8% compared with the present rate of 2% which suggests the sector will be killed off in any case under the present settings, just more slowly.
The summary report of the OLW programmes recognises this may not be acceptable to New Zealand as a whole because of the impact on rural communities, whether from loss of employment and rural services or on rivers and downstream settlements from forestry slash, in which case a conversation is needed to decide what alternatives are available. Unfortunately the only thing not in question appears to be the 2050 goals which are obviously sacrosanct.
At this point I began to question my sanity. We, the taxpayers, have funded a scientific research programme whereby several different groups of scientists have been beavering away for several years to discover there is only one solution to the problem under current policy settings. In short this entails destroying what has been the backbone of New Zealand’s economy for 150 years.
The phrase “under current policy settings” provides the one get-out clause to this impending disaster. The question is therefore what the current government intends to do to amend the policy settings. In reply to my question about progress Trade Minister Todd McClay’s office said “policies are still being worked through. The Government is seeking to incentivise a balance of land uses to achieve improved outcomes for agriculture, forestry and the climate while considering the impact across the rural economy.”
It is looking at the appropriate settings for land use classes 1-6. It is also considering proposals to limit some farm conversions to forestry that can be registered in the ETS and will be able to say more about this soon. However there are currently no plans to change the recognition of forestry in the ETS relative to carbon credits which means New Zealand will continue to be the only country to allow 100% of carbon credits to be claimed. This means the incentive to buy land for forestry conversion purely to offset polluting emissions remains as before, provided it complies with any new land use classifications.
Simon Upton, Commissioner for the Environment, has submitted his reaction to the government’s second emissions reduction plan which casts serious doubt on its ability to meet either the first or second emissions budget for emissions reduction. His greatest concern is “the plan’s reliance on the New Zealand Emissions Trading Scheme (NZ ETS), which in its current form suppresses carbon prices, discourages gross emissions reductions and incentivises the planting of large areas of land in pine forests.”
He points out the ETS was established it was supposed to be an interim measure to allow new low emissions technologies to be developed, but these don’t yet exist which means forestry carbon offsets have become the easiest way for fossil fuel polluters to offset their emissions. He cites several problems with this approach including the loss of productive land to forestry and the effect on rural communities, the long term removal of land for alternative purposes and the potential for unlimited carbon offsets to push the carbon price below the level needed to encourage gross emissions reduction and develop new technologies.
This whole scenario suggests New Zealand is not only in danger of missing its climate change commitments, but also abdicating its longstanding capacity to produce high quality food for the world, as recognised in the Paris Accord in 2016. It has failed so far to find a remotely suitable balance between competing factors – climate change and the environment on one hand and the economy, society and community on the other.
Current schedule and saleyard prices are available in the right-hand menu of the Rural section of this website.
M2 Bull
Select chart tabs
36 Comments
The best way to meet our climate target is to walk away from non-binding Paris Accord and educate the world, the politicians, the school teachers, the ecotards... on our net zero status.
"New Zealand was a net CO2 sink of −38.6 ± 13.4 million tonnes C yr−1.
...Counting both territorial and non-territorial emissions Zealand's net atmospheric CO2 contribution (∆CA) were −34.6 ± 13.4 million tonnes C yr−1
New Zealand's non-territorial carbon emissions (i.e., those emissions embedded in fossil fuel, wood, crops, and livestock exported and consumed overseas) only contributed 3.9 ± 1.1 million tonnes C yr−1."
https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2023GB007845
"Academics can quibble (it’s what we do best) about the exact factors, but the fact that this formula is vastly more accurate than the traditional accounting rule is indisputable.
...Even more strikingly, if an individual herd’s methane emissions are falling by one third of one percent per year (that’s 7/2100, so the two terms cancel out) – which the farmers I met seemed confident could be achieved with a combination of good husbandry, feed additives and perhaps vaccines in the longer term – then that herd is no longer adding to global warming."
https://newsroom.co.nz/2019/03/28/a-climate-neutral-nz-yes-its-possible/
The marketing angle doesn't stand scrutiny given the delirious abandon people purchase coal derived chinese products. China purchased 60 million tonnes of logs in 2019 and is now purchasing less than 40 million/annum in the past two years - where exactly are all of these trees going to be sold to?
You have an uphill battle against a media that decided over a decade ago that no such questions to the narrative of climate change are permissible. I was at university studying envrionmental studies when Stuff decided they would no longer have comments on articles about climate change. I remember some classmates celebrating the idea, and I responded by changing majors. Even now your reasonabe argument would simply be characterised as a form of climate change denial, labelled misinformation, and ignored. There is an element of mass hysteria to contend with.
No one could have for seen this. Lol.
Despite protestations to the opposite I can't help but feel scientists in general are very much in the business as usual camp. They seem to keep looking for mitigation rather than telling it like it is. The only way to fix this is to get to zero Fossil fuels emissions, there is no other way
Land owners should be able to farm their properties in the way that best benefits them.
I'm guessing however, in thirty years time, these trees will have zero value, apart from the fact they contain carbon? Carbon credits will have been sold and the timber itself will be worth nothing, due to China retrenchment along with other markets. Perhaps useful for bio energy?
Whether animal products are worth anything will be a moot point. By the time vegan billionaires have industrialised precision fermented protein, and spent vast resources on PR, meat will be niche at best.
The gold rush attitude of the genetic cut and paste mob will speed the demise of NZs current natural food status.
How are we killing that option off? Planting trees? There's a large swath of NZ land that should never have been deforested in the first place.
Replanting in a single species, never to be harvested, is ecological vandalism, but no more so than clearing the original forest. Unfortunately even planting in natives isn't going to retrieve what has been lost.
How will the future of farming.look? Confidence in farming animal protein is probably misplaced. There's massive amounts of money being poured into synthetic food technology. Will there be a wealthy subset of people wanting real food? One can hope, but human behaviour can be modified rapidly. Only got to look at the animal fur/fibre industries.
The threat to killing our quality farmed food options comes more from clowns in the beehive and industrial food lobbyists that control them, rather than trees.
when politicians signed up to the Paris agreement it seemed a long way away and in New Zealand's case thought they were going to make a ton of money from planting trees. now that we are all on the doorstep of having to actually meet these commitments, the realities are coming home to roost. The rushed transition is gutting economies. Germany is leading the way and New Zealand's not far behind.
Round this way, a lot of forestry land has been converted back to farmland. Mostly dairy but some as runoff or beef. That has been both pine and gum tree forests. I have no doubt that if circumstances change, a lot of newly planted pine forests will be converted back to farming.
We are pathetically slow learners. The impact on our countryside will be diabolical. The ETS is nothing more than another financial product for business, it is not really about the environment however well disguised. Let alone NZ paying and closing off productivity here just so a lesser regulated and more polluting country continues on its happy way, even happier because we are rewarding it to do so. And re "...improving water quality is to convert half of all sheep and beef farms progressively to pine forests". Article in the Herald this morning (I think that is where I read it), pine trees are huge absorbers of water and we will see threat to flow streams and rivers in 10-15 years time.
The white paper compared externalities of farming with forestry, by measuring the externalities of farming only and ignoring those of forestry. So they measured, nitrates, phosphates and sediment. Just starting with that, MoE assumes that 15% of sediment in rivers is from mountains/forest parks. How do they distinguish between farm sedimentation and forestry? They excluded forestry slash, herbicide and pesticide damage from blanket poisoning of whole hillsides. "this isn’t a completely balanced comparison of the two."Dr Kaye-Blake
Bloody trees – or is it really?
The Ag Research report is written solely by Ag people, in saying that the result that we are going to plant all of NZ in pines is laughable, as is PCE report.
The land is all owned by … farmers. They will decide and it depends to a large degree on the ability of sheep and beef to be truly profitable. Even then it would take a century to plant it all and where is all that capital coming from? Silly stuff.
Heres a few points as to why sheep numbers are falling – read this report
https://beeflambnz.com/knowledge-hub/PDF/new-season-outlook-2024-25.pdf
• Farm Profit Before Tax is forecast to decrease 52% — to $23,700 on average per farm for 2024-25. This is the lowest level of farm profit for East Coast on record except for 2007-08
• Farm Profit Before Tax decreases 11% — to $48,400 per farm for 2024-25. The predominant Farm Class in the region is finishing breeding farms (Farm Class 6), which are forecast to average $32,300 in farm profit before tax. This leaves many farms in a cash loss situation. Marlborough/Canterbury.
• Farm Profit Before Tax increases 6.9% — to average $20,200 per farm for 2024-25. This is the lowest expected profit for any region this season and in real, inflation-adjusted terms, 2023-24 and 2024-25 are estimated to be the lowest farm profit before tax for Otago-Southland on record.
Remember this is Voodoo economics profit as its before drawings, tax, principal repayment and any farm capital reinvestment.
If you look at a graph of sheep numbers for the last 25 years it’s a falling 45 degree angle down. This trend is virtually unbroken and continuing.
Before blaming anyone or anything the problem is it doesn’t work economically anymore.
In 2022-23, 11% of farms had no interest-bearing debt, while one-third of farms paid interest of up to $30,000.
In effect around 50 – 60% of the farms will get through – albeit on a lifestyle basis for many. The other 50% have too much debt relative to the earning potential of the business and can’t even make a living (you get more on the unemployment benefit).
From my dealings with lots of farmers I would say the average loss last season will average around $150 - 200,000 - there words not mine (I've been told some very large scary numbers as well by a farm advisor). Unless we see a significant increase in returns (meat companies??)and fast fall in interest rates it probably wont be much different this season. This debt compounded onto existing debt will just increase the burden.
Alan and co would be far better focused on what they are going to do to improve the profitability of this sector – if they don’t manage to do this the downward trend will continue trees or no trees.
And when one looks at those poor sheep farm profits the question remains, how can run down infrastructure be replaced.
There are miles of fences, yards, buildings etc that were put up in the 70s and 80s with Govt subsidies. Remembering that 2 or 3 wire electric fences don't work very well with sheep.
$30-40 per meter to put up a stock proof fence x 50+ kilometers on many properties. Not to mention the woolshed etc that needs replacing.
Maybe it could be arranged that only sheep farmers can win lotto every week, even then that wouldn't be enough!
Not just here - multiple issues at play here and around the world which all boils down to people have options and there still seems to be enough food being provided. Bumper soy harvests in Brazil and US causing price to fall and pain there as well but we seem intent in thinking there is a food shortage.
https://www.telegraph.co.uk/money/inheritance-crisis-facing-britain-far…
Farmers in the U.S. and Brazil face sobering market outlook (farmprogress.com)
Yes, even on my 10 acre block , can't justify the fencing costs to even run fairly intensive calf rearing. mind you , the vegetable alternative aint proving easy either.
Maybe a start would be if the roads , and other public boundaries would at least pay 1/2 the costs, I don't understand why this is not the case.
It may come to be similar to England , where farmers are paid a subsidy to continue or restore pasture grazing. But it is a farm subsidy , not as product subsidy.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.