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EXPORT HOGGET PRODUCTION ON LOWER NORTH ISLAND HILL COUNTRY SHEEP FARMS
A thes i s p resented i n pa rt i a l fu l fi l ment of the req u i rement s for the deg ree of Master of Agri cultu ra l Sci ence i n Farm Mana gement at Mas sey Uni vers i ty .
A l an Bel l Wa l k er 1984
i TABLE OF CONTENTS
TABLE OF CONTENTS i
LIST OF TABLES vii
LIST OF F IGURES X
ACKNOWLED GEMENTS xi
ABSTRACT xii
CHAPTER ONE : INTR OD UCTION TO STUDY
1.1 Objectives of Thesis 1
1.1.1 Export Hogget Production 1 1.1.2 Economics Section of the Advisory 3
Services Division of the MAF
1.1.3 Interactive A pproach to Farm Management 4 Research
1.2 Outline of Thesis 4
CHAPTE R TWO : STUDY CONTEXT AND APP R O ACH
2.1 Introduction 6
2.2 The Economics Section of the Advisory Services
Division of the MAF 6
2.2.1 The Role of Economics Section in Farm
Management Research 10
2.3 Industry Requirements 14
2.3.1 On-Farm Requirements 14
2.3.2 Off-Farm Requirements 15
2.4 Study Approach 16
2.4 .1 Problem/Op portunity Definition 18
2.4.2 Situation Analysis 18
2.4.3 S ystems Modelling 20
TABLE OF CONTENTS ( Cont ' d )
Page
2 . 4 . 4 Output Anal ysi s 20
2 . 4 . 5 Fa rm Moni to ri n g Scheme 21 2 . 4 . 6 I nte ract i ve D i s cu s s i on 24
2 . 5 C h apter Conclu s i on 24
CHAPTER THRE E : A REV I EW OF SHEEP MEAT PRODUCT I O N SYSTEMS AND THE POTENTI AL OF EXPORT HOGGET FOR LEAN MEAT PRODUCT ION
3 . 1 I n t rodu ct i on
3 . 2 Sheep Farmi n g Sy st ems i n New Zeala nd 3 . 3 I nte rdepende nce of Farm Clas ses 3 . 4 Hogget Compos i t i on of Flock s 3 . 5 Potenti al S u p ply of Export Hogget 3 . 6 Hogget Slau ght e r Patterns
3 . 7 Market Pot ent i al For E xport Hogget
3 . 8 Sheep Meat Ca rcase Sui t ab i li ty fo r Con s u me r
26 26 29 29 33 34 36
Dema nds 38
3 . 9 Ca rcase Compos i t i on 39
3 . 1 0 Mana gement Strategi es to P roduce Leane r , La rger
Ca rcases 40
3 . 1 0 . 1 Sla u gh t e r at L i ghte r Wei ghts 3 . 1 0 . 2 Stoc k i ng R ate
3 . 1 0 . 3 Ram Lambs
40 41 41
3 . 1 0 . 4 B reeds 41
3 . 1 0 . 5 Ea rly Wean i ng 42
3 . 1 0 . 6 I n c reased Twi n n i n g 42
3 . 10 . 7 Rot at i on a l Graz i n g 42
3 . 1 0 . 8 Di f fe renti al Slau ghter Patt e rn s 43 3 . 1 0 . 9 Sel e ct i on
3 . 1 0 . 10 Comb i n at i on St rategi es 3 . 1 0 . 1 1 Hog get Ca rca s e Compos i t i on 3 . 1 1 C h apter Conclu s i on
43 43 44 44
( Cont'd )
i i i
TABLE OF CONTENTS (Cont ' d)
Page (Cant ' d)
CHAPTER FOU R SYSTEMS ANALYS I S - E XPORT HOGGET PRODUCT I O N : SYSTEM COMPONENTS AND I NTER- R ELAT I ONSH I P S
4 . 1 I nt rodu ct i on 46
4 . 2 Pastu re S u b sy s t em Components 48 4 . 3 An i ma l S u bsy s t em Components 51 4 . 3 . 1 Ewe F eed Req u i rement s 51 4 . 3 . 2 Pos t -Weani n g Lamb and Hogget Feed
Req u i rement s 56
4 . 3 . 2 . 1 De ri vat i on of Lamb/Hogget
Feed Requi rement s 58
4 . 3 . 3 4 . 3 . 4
4 . 3 . 2 . 2 Dres s i n g Out Pe rcenta ges for Lamb , Export Hog gets and Ewes
Catt l e Feed Req u i rements Chapter Con c l u s i on
CHAPTER F I VE : SYSTEMS SYNTHES I S - FEED BUDGETI NG
59 59 60
5 . 1 I nt rodu ct i on 61
5 . 2 Feed Bal a n ce App roach ; Ewe Redu ct i on
St rat egi es 62
5 . 2 . 1 Stat u s quo Feed Dema nd 63
5 . 2 . 2 Feed Rel ea s e 64
5 . 2 . 3 I nt rodu ct i on of Export Hogget s 65 5 . 3 C att l e Redu ct i on Strateg i es 67 5 . 4 Cu l l Two- Toot h Sal e Strategi es 68 5 . 5 M i scel l aneous P rodu ct i on (Model l i n g)
A s sumpt i on s 69
5 . 5 . 1 S a l e of Cu l l Two-Toot h s as Export
Hog gets 69
5 . 5 . 2 5 . 5 . 3
TABLE OF CONTENTS ( Cont • d )
Lambi n g Percent a ge
Ama l gamat i on of Lamb F eed i n g Mobs
69 70 5 . 6 Speci f i c F a rm Mon i tori n g Mode l s 70 5 . 6 . 1 Man awatu Sma l l H i l l 7 1 5 . 6 . 2 Hawkes Bay/Wai ra rapa E as i e r H i l l 7 7 5 . 6 . 3
5 . 6 . 4 5 . 6 . 5
Manawatu/Tai hape Hi l l
Hawkes Bay/Wai ra rapa H a rde r H i l l Tai h ap e/Wanganui No rt h I s l and H a rd H i l l
5 . 7 Feed Bal a nce F i ndi ngs
5 . 8 S i mu l at i on Model l i n g of Wi nt e r Past u re Mana gement
5 . 9 Chapter Con c l u s i on
CHAPTER S I X : OUTPUT ANAL Y S I S - F I NANC IAL AND PHYS I CAL
82 87
92 97
105 109
6 . 1 I nt rodu ct i on 1 1 1
6 . 2 Gross Ma rgi ns Ana l y s i s 1 1 1
6 . 3 Sens i t i vi ty Ana l ys i s 1 15
6 . 4 Sy stem Output Anal y s i s 123
6 . 5 Cash F l ow Anal y s i s 127
6 . 6 Chan ge-over to E xport Hog get P rodu ct i on 1 30
6 . 7 Chapter Con c l u s i on 1 3 1
CHAPTER S E V E N : SYSTEM VAL I DAT I ON - I NTERACT I VE D I SCUSS ION
7 . 1 I n t rodu ct i on 1 33
7 . 2 Object i ves of I nte ract i ve Di s cu s s i on 133 7 . 3 Theo ret i ca l Bas i s for I nterat i ve D i s cu s s i on 1 34
7 . 4 7 . 5
TABLE OF CONTENTS ( Cont 1 d )
S u rvey Method
I nte ractive Dis c u s sion Findings 7 . 5 . 1
7 . 5 . 2 7 . 5 . 3 7 . 5 . 4
Export Hogget P rodu ction Mode l l i n g Assumptions Mode l Changes
E xt e rn a l it i es 7 . 6 C h apt e r Con c l u sion
CHAPTER E I GHT : USE OF RESEARCH F I ND I NGS I N DEC I S I ON S U P PORT
8 . 1 I nt rodu ction 8 . 2
8 . 3
E xp o rt E xp o rt 8 . 3 . 1 8 . 3 . 2 8 . 3 . 3 8 . 3 . 4 8 . 3 . 5
Hog get P rodu ct i on : Hog get P roduction
Profi tabi l i ty Fea s i bi l ity Des i rabi l i ty Sy stem Output Ri s k
8 . 4 E xt e rna l i ties
Pot ent i a l Syst ems
8 . 4 . 1 8 . 4 . 2
On - F a rm E xterna l ities Off-Farm E xterna l i t i es 8 . 5 Addition a l R esea rch I nf o rmation 8 . 6 Chapt e r Con c l u sion
CHAPTER N I NE EVALUAT I ON
9 . 1 I nt rodu ction
9 . 2 S uit a bi l ity of Research App roach 9 . 2 . 1 Des k Resea rch Phase
S u pp ly
9 . 2 . 2 I nt e ractive Discussion P h a s e
V
Page ( Cont 1 d )
137 141 141 148 1 49 1 49 151
152 152 153 153 156 158 159 160 160 160 162 163 165
166 166 1 66 168
TABL E OF CONTENTS ( Cont ' d )
Page ( C ont ' d )
9 . 3 Resea rch Met hods 168
168 170 1 7 0 1 7 2 1 7 2 1 7 3 9 . 3 . 1 Des k Res ea rch P h a s e
9 . 3 . 2 I nte ractive Dis c u s sion P hase 9 . 4 Study Obj e ctives
9 . 4 . 1 I ndu s t ry Pe rspective 9 . 4 . 2 I nstitution a l Pers pective 9 . 5 Chapt e r Con c l u sion
BIB I L I OGRAPHY APPEND I X ONE AP PEND I X TWO
APPEND I X THR E E APP END I X FOUR APPEND I X F I VE APP END I X S I X APPEND I X SEVEN
-
APPEND I X E I GHT
AP PEND I X N I NE
1 7 4
I N I T IAL FARMER SURVE Y 181
E ST I MAT I NG FU NCT ION FOR LAMB AND HOGGET 193 FEED REQU I REME NTS
STOCK RECONC I L IAT I ONS F E E D BUDGETS
GROSS MARG I NS/BREAK - E V E N SCHEDULES SY STEM OUTPUT
CAS H FLOW PROF I LES FOR HB/WAI RARAPA EAS I ER H I LL
QUE STI ONNA I RE/CHEC KL I ST USED I N I NTERACT I VE D I SCUSS I O NS
( a ) L I NEAR PROGRAMM I NG SPEC I F I CAT I ON
194 200 226 234 236
243
OF EXPORT HOGGET PROD U CT I ON MODELS 250
EXPORT HOGGET PRODUCT I ON MODELS ( b ) L I NEAR PROGRAMM I NG MATR I X -
MANAWATU SMALL H I LL MODEL 253
Tab l e 3 . 1
3 . 2 3 . 3 3 . 4
3 . 5 3 . 6
4 . 1 4 . 2 4 . 3
4 . 4 4 . 5
LIST OF TABLES
E st i mat es of Numbe r of S heep F a rms and N umbe r o f Sheep by Farm Type
Farm P roduct i on by Farm C l as s ( 1 980 / 81 ) Al l C l a s s es Farm - F l ock St ructu re - Wi nt e r Numbe rs
Fl o ck Compos i t i on E xp res sed i n Percentage Te rms by Farm C l a s s ( 1980 )
Hogget S l a u ghteri n g
Sheep C a rcases G raded f o r E xp o rt
Seasona l Pastu re Qu a l i ty Coeff i ci ents
Ta rget Ewe L i vewe i ghts and L i v ewei ght Changes Fl ock Lamb i n g Stat u s at Speci f i ed L ambi n g Percent a ges
Lambi n g S p read
Lamb Feed Requi rements F rom Th ree Data Sou rces
5 . 1 . 1 Man awatu Sma l l H i l l 5 . 1 . 2 Manawatu Sma l l H i l l
Requirements
P rodu ct i on Det ail s Who l e Flock Feed
5 . 1 . 3 Ma nawatu Sma l l H i l l Rep l acement and Exp ort Hog get G rowth P rofi l e and Feed Requ i rements
27
28 31 32
34 35
50 5 1 54
55 57
73 74 75
5 . 1 . 4 Ma nawatu Sma l l H i l l Lamb G rowth P rofi l es and 76 Feed R equ i rement s
5 . 2 . 1 Hawkes Bay /Wa i ra rapa E as i e r H i l l Detai l s
5 . 2 . 2 Hawkes B ay /Wa i rarapa E as i er H i l l Feed R eq u i reme nt s
P rodu ct i on 78 Whol e Fl ock 7 9
5 . 2 . 3 Hawkes B ay /Wai rarapa E as i er H i l l Rep l acement 80 and E x p o rt Hogget G rowt h P rofi l es and Feed
Requ i rements
5 . 2 . 4 Hawkes Bay /Wai ra rapa E as i er H i l l Lamb G rowth P rofi l es and Feed Requi rement s
81 v i i
LIST OF TABLES ( Cont ' d )
Page ( Cont ' d )
5 . 3 . 1 Ma nawat u /Tai hape H i l l P rodu ct i on Detai l s 83 5 . 3 . 2 Manawat u /Ta i hape H i l l Who l e F l oc k Feed 84
Requ i re ments
5 . 3 . 3 Ma nawat u /Tai hape H i l l Rep l a ceme nt and Export 85 Hogget G rowt h P rofi l es and F eed R equ i rement s
5 . 3 . 4 Manawat u /Tai hape H i l l Lamb G rowth P rofi l es and 86 Feed R equi rements
5.4 . 1 Haw k es Bay /Wa i ra rapa Harde r H i l l P rodu ct i on 88 Det a i l s
5 . 4 . 2 Hawk es Bay /Wa i ra rapa Ha rde r H i l l Whol e F l ock 89 Feed R equ i rements
5 . 4 . 3 Haw k es Bay /Wa i ra rapa H a rde r H i l l Rep l a cement 90 a nd E x p o rt Hog get G rowt h P rofi l es and Feed
Requ i rements
5 . 4 . 4 Hawkes Bay /Wai ra rap a Harde r H i l l Lamb Growth P rofi l es and F eed Requi rements
5 . 5 . 1 Ta i h ape/Wanganui Nort h I s l and H a rd H i l l P rodu ct i on Det ai l s
5 . 5 . 2 Tai h ap e/Wanganui North I s l and H a rd H i l l Who l e F l ock F eed Requi rements
5 . 5 . 3 Tai hape/Wanganui North I s l and H a rd H i l l
Rep l ac ement and Export Hogget G rowth P rofi l es and F eed Requ i rement s
9 1 93 94 95
5 . 5 . 4 Tai hap e/Wan ganui North I s l and H a rd H i l l 96 Lamb G rowt h P rofi l e and F eed Requi rement s
5 . 6 . 1 Manawatu Sma l l H i l l Feed Dema nd P rofi l es 99 5 . 6 . 2 H awkes B ay/W a i ra rapa E as i e r H i l l Feed Demand 100
P rofi l es
5 . 6 . 3 Ma nawatu /Tai hape H i l l Feed Demand P rofi l es 1 0 1 5 . 6 . 4 H awkes B ay/W a i ra rapa H a rd e r H i l l Feed Demand 102
P rofi l es
5 . 6 . 5 Tai h ap e /Wanganui Nort h I s l an d H a rd H i l l 103 F eed Dema nd P rofi l es
i x L I ST OF TABLES ( Cont • d )
Page (Cont•d )
5 . 7 . 1 1 R i ve rs i de 1 S i mu l at i on : Average Pastu re Cover 1 07 at 3 1 Ju l y 1 983
5 . 7 . 2 Pastu re Cove r D i s t ri but i on at 3 1 Ju l y 1 983 108
6 . 1 6 . 2 6 . 3
Under Va ri ou s Management St rategi es
De ri ved E xp o rt Hogget B reak -E ve n Schedu l e For Export Hogget P rodu ct i on St rategi es
B reak-Even E xp o rt Hogget Schedu l e Va ri at i ons Res u l t i n g f rom Vary i ng Pa ramet e rs
Exp o rt H ogget B reak-Even Schedu l es for Ewe Redu ct i on St rat egi es at Two Leve l s of P e rfo rma nce
1 14 1 18 1 20
6 . 4 Export Hogget B reak-E ven Schedu l e for Al t e rnat i ve 1 2 2 6 . 5
6 . 6 6 . 7 6 . 8 6 . 9
Hog get G rowt h P rofi l es
Export H ogget Sy st ems : Out put Ana l y s i s ( a ) Ewe Reduct i on Average Performa nce Export Hogget Sy st ems : Output Analy s i s ( b ) Ewe Reduct i on Medi u m Performa nce Export Hogget Systems : Output Ana l y s i s ( c ) Catt l e Reduct i on Ave rage P e rformance
Hawkes Bay/Wa i ra rapa : Mont h l y Cas h Fl ow P rofi l e for Sheep Component On l y
Hawkes Bay/Wai ra rapa E as i e r H i l l Mont h l y Whol e F a rm ( Revenue and E xpend i tu re ) Cash F l ow
I nc l udi n g E st i mated Ove rdraft Payment s
124 1 25 126 128 1 2 9
F i gu re 2 . 1
4 . 1
6 . 1
7 . 1 7 . 2
9 . 1 9 . 2 9 . 3
L I ST OF FIGURES
D i ag rammat i c Rep rese nt at i on of Resea rch App roach U sed i n Study
Sch ema of Export Hog get P roduct i on System - Showi n g C omponent s (s u bsy s tems) and
Int e r- re l ati on s h i ps
Di ag rammati c Rep resentat i on of B rea k - E ven Export Hog get S chedules
Pe rs onal Int e ract i on Model of Extens i on Summa ry of Inte ract i ve D i s c u s s i on St ruct u re and Con d i t i ons
Schemat i c Rep res entat i on of Sci ent i fi c Method i n Operat i ons Research
Sch emat i c Rep res ent at i on of New P rodu ct Devel opme nt P rocess
Bas i c Steps of Systems Research
F ol l owi ng P age 1 7
47
1 1 4
135 140
166 167 167
xi
ACKNOWLEDGEMENTS
T h e re i s a l a rge numbe r of peop l e to whom the aut h o r wi l l remai n i ndebt ed for t h e i r i nput i nto t h i s thes i s . Many can on l y be
ack now l edged c o l l ect i ve l y , ot h e rs mu st recei ve i nd i vi du a l recogn i t i on .
F oremost i s P rofes sor Bob Town s l ey , my supervi s o r and mentor , wh o ga ve so gen e rou s l y and pat i ent l y of hi s t i me i n p rovi di n g gu i dan ce and const ru ct i ve c ri t i ci sm du ri n g al l st a ges of thi s study . The aut hor wou l d a l s o l i k e to thank a l l the ot her Mas s ey staff membe rs whom he pes t e red at v a ri ous stages of hi s studi es . Thei r as s i stance made my t i me at Mas s ey a most be nefi ci a l and enj oyab l e experi ence .
The Mi n i s t ry of Agri cu l t u re and F i s he ri es have bee n gen e rous
emp l oy e rs , and to the ma ny col l eagues who assi sted wi th i nformat i on and di s cu s s i o n I gi ve my than k s . I mu st al s o ack nowl edge the fa rme rs vi s i t ed du ri n g the cou rs e of two su rvey s - wi thout thei r co-ope rat i on t h i s study cou l d not have been unde rt a k en .
The author i s most app reci at i ve of the typ i sts i n vol ved i n thi s p resentat i on . To Barba ra Wa l k e r and Adri enne Kende l l who ma na ged to deci p h e r the ori gi nal draft s , and to Ba rba ra Ma rsha l l who prepa red the fi n a l ma nusc ri pt .
And fi nal l y I mu st ack now l edge my wi fe Ba rba ra who showed great pati ence and understand i n g i n p rovi di n g unendi n g s u p p o rt .
Def i c i enci es i n thi s thes i s are not att ri butab l e to any of those men t i oned .
ABSTRACT
The pu rpose of th i s p roj e ct was to i nvest i gate s ome of the farm mana geme nt i mp l i cat i ons of exp o rt hogget p roduct i on on l owe r Nort h
I s l a n d H i l l cou nt ry fa rms f rom the perspect i ve o f a F a rm Advi s ory Offi c e r ( Economi cs ) ope r at i n g wi t h i n the Advi s o ry Servi ces Di vi s i on ( ASD ) of the New Zeal a nd Mi n i s t ry of Agri cu l tu re and F i sheri es ( MAF ) . To establ i s h t h e context i n wh i ch the study i s set , a bri ef revi ew of t h e res pons i b i l i ti es of the Economi cs Sect i on of ASD i s p resented as a p recu rs o r to devel opi n g t h e i nst i tuti onal and i nd u s t ry requ i rement s of f a rm ma na gemen t resea rch pe rfo rmed by staff of the Economi cs Sect i on o f ASD .
B ri ef re vi ews of exi sti n g s heep meat p rodu ct i on syst ems , mana gement syst ems for p rodu ci ng l ea n meat , and the ma rket requi rement s for export hog get , i nd i cat e l i mi ted pot ent i a l fo r fu rt h e r expa ns i on of
I
hogget product i on fo r expo rt unde r condi t i ons of re l at i ve p rofi tabi l i ty . S i mp l e feed budget i ng/gross ma rgi ns ana l y s i s p rocedu res are used to sy nt hes i s e and eva l uate export hoggetp roduct i on st rategi es fo r a range of l ower Nort h I s l and hi l l cou nt ry f a rm types . Schedu l e p r i ces , for export hogget meat , suffi ci ent to break -even wi t h p re exp o rt hogget p rodu ct i on st rat e g i es a re
establ i s hed , and the sens i t i vi ty of these break -even schedu l e pri ces to a range of management , output , and p rodu ct pri ce va ri ab l es i s i n vest i gated .
A h i gh l i ght of the res e a rch app roach i s an i nt e ract i ve component of the res ea rch p roces s , dev�l oped f rom Kel l y ' s ( 1965 ) Personal Con s t r u ct Theory and Woog ' s ( 1982 ) P e rs onal I nt e ract i on Mode l of Ext ens i on , i n wh i ch p rev i o u s l y deve l oped mode l s a re u sed as a bas i s fo r i nte ract i ve di s cu s s i ons wi th farme rs .
xi i i
ABSTRACT (cont d)
Export hogget p rodu ct i on i s shown to be feas i b l e , a l thou gh not neces s a ri l y fu l l y comp at i b l e wi t h , or des i rab l e u nde r , al l exi st i ng h i l l cou nt ry s heep p rodu ct i on syst ems i n ves t i gated. Export hogget p rodu ct i on ap p e a rs to have great est pot ent i a l appea l to mode ratel y i ntens i ve farmi n g sy st ems p ract i s ed under cond i t i on s whe re summe r pastu re produ ct i on i s poo r , rel ati ve to wi nt e r gras s growth .
The ove r-ri di n g conc l u s i on i s that , wh i l st hogget p rodu ct i on may have me ri t as a mea n s of p rodu ci n g l a rge r , l eane r , ca rcases fo r export , and whi l st cu r rent produ ct i on sy stems ap pea r cap a b l e of produ ci n g l i mi t ed amounts of expo rt hogget , cu rrent schedu l e payments pre c l u de any
1 rat i onal deci s i on to p roduce hogget fo r export .
