Generational shift in sheep farming and beef livestock production in New Zealand

According to a Rabobank report, approximately 17,000 farm and orchard owners will reach retirement age over the next decade. In the sheep and beef sector, the average age of farmers is around 50, yet a significant portion are preparing to end their careers, which implies the transfer of assets worth $150 billion to the next generation.

Richard Dawkins, chairman of the Federated Farmers Meat & Wool section, notes a growing interest among young people in working on family farms. According to him, this is driven by increased profitability in the sector, fueled by high demand and strong prices for meat, wool, and beef. The situation is also being improved by favorable interest rates, government policy support, the development of agricultural technology, and climatic conditions.

Following a difficult period after the Covid-19 pandemic, when many farms were forced to cut costs, limit fertilizer application, and defer maintenance, new conditions have formed in the industry. Banks have become more willing to provide loans to young farmers, reflecting the increased confidence of sector participants.

Nevertheless, Richard Dawkins points out ongoing difficulties related to the mismatch between market land prices and the productive capacity of farms. A separate problem remains the competition from tree planting for carbon credits. Dawkins estimates that approximately 400,000 hectares of agricultural land have already been converted to carbon forestry, which raises concerns over the loss of productive areas. Even though the current government has slowed the pace of such conversions, the industry continues to face challenges due to subsidies from the emissions trading scheme.

Despite economic barriers and debt servicing difficulties, the interest of young people in the succession of family farms persists. Owners see the current situation as a unique opportunity for passing the business to the next generation, valuing not only the economic prospects but also the lifestyle associated with farm work.