The potential for commercial organic sheep farming in the South Island

Abstract

The organics industry in New Zealand is experiencing rapid growth with $20 million of organic products exported in the year to June 1997, a 67% increase on the year before. Kiwifruit and processed vegetables from Heinz Watties are the major earners.[1] The demand for organic food produce in the USA, the largest single market, is growing at 23% per annum compared to 3% for conventional food produce. [2] There are major opportunities for New Zealand to capitalise on this consumer demand for clean organic food. The New Zealand organic livestock industry is small and fragmented. There are 60 - 70 organic certified and uncertified sheep and beef farmers in New Zealand. There are two independent certified groups in New Zealand which register farmers under the BIO-GRO and Demeter labels. New Zealand has two organic livestock research farms at Winchmore near Ashburton and at Ballantrae near Palmerston North. Stock production after the initial two year conversion period required for BIO-GRO certification compares favourably with conventional production levels. Selection of worm resistant sheep, herbal pasture mixes and specialist forage crops high in protein will help to minimise production losses in young sheep. Organic sheep farming compares favourably with conventional sheep farming on a financial basis. The organic stock production was 93% and 84% of conventional production based on per stock unit and a per hectare basis. To match conventional farming on a per stock unit basis would require a 7.5% premium for meat or a 20% premium for wool. There is a small and static domestic demand for organic meat products attracting around a 15% premium. Many organic growers sell their produce through conventional channels. Individuals who have developed export markets for their organic lamb and beef are achieving premiums up to 120% for lamb and 300% for beef in the high value restaurant trade.[3] One of the four South Island meat companies processes small quantities of organic lamb and beef. The general consensus is that at present there is not a consistent international demand for organic meats. There would also be problems sourcing the quality and quantity of stock demanded for export markets. The supply and demand for organic wool is less clear. The associated problems of farming sheep without dipping for lice or flystrike can be overcome but most wool is sold through conventional markets. There are some companies interested in sourcing organic wool from Europe and the USA. The potential for commercial organic sheep farming in the South Island rests with exporting organic certified lamb into the high value, zero quota, niche markets of Asia and the USA. Premiums for organic wool in Europe and the USA markets would be a bonus. The demand for organic meat products far exceeds the supply from existing farmers and will continue to, until top conventional farmers take up the challenge of farming organically. Ultimately it may be the consumers with their growing concerns about food safety, animal welfare and quality issues that will hold the key for growth of the South Island organic sheep farming industry.