Whanganui Chronicle

Sheep and beef profits could be halved by 2100

- Jamie Morton

New Zealand’s sheep and beef farm profits could be halved by the century’s end if global greenhouse emissions keep soaring unabated, a new analysis suggests.

Dairy farms, meanwhile, could take an average 20 per cent hit as a result of drier soils.

The new study, which comes as farmers in rain-starved parts of the country are grappling with unusually dry conditions, drew on around 70,000 tax returns and a range of temperatur­e and soil moisture data.

It found a clear link between farm profits and local weather.

When they extrapolat­ed the data forward, the researcher­s found that, under a business-as-usual emissions trajectory with little climate action and high economic growth, sheep and beef farmers could suffer a profit loss of up to 54 per cent.

The estimate, which was subject to a high degree of uncertaint­y, reflected how sheep and beef operations were vulnerable to high temperatur­es as well as soil moisture loss.

The effect of hotter temperatur­es on dairy farming was less clear, but on the basis of soil moisture loss alone, the sector, with a current export value of $20b, could see a profit loss of 20 per cent by 2100.

The analysis also found drier soils had immediate effects on dairy profits, but lagged effects on sheep and beef profits.

Each very dry day caused, on average, dairy and sheep and beef farms a loss in annual profits of around one average day, but hit the sectors in the same year, and over two years, respective­ly.

Due to large capital investment­s, it remained difficult for farmers to change the way they used their land.

While the creeping pace of warming meant it was unlikely that climate change would force landuse change in the near future, this could still play out in some parts of the country eventually.

“However, what’s important is the relative attractive­ness of animal versus other land uses,” lead researcher Dr Kendon Bell said.

“To gain a full understand­ing of how climate change might affect land-use pressures, we require profit-weather functions for all relevant land uses, in addition to those provided here for dairy and sheep and beef.”

Bell said that understand­ing the scale of the expected climate impacts across all sectors was key for central government when considerin­g future budgets for adaptation support.

“If, as a hypothetic­al example, the scale of expected net damages to agricultur­e was one per cent of the expected net harm to human health, it would be difficult to justify putting 50 per cent of central government’s adaptation budget into agricultur­e,” he said.

“However, these quantitati­ve comparison­s are not yet straightfo­rward, because the underlying quantitati­ve studies have not yet been executed across all sectors.”

 ?? Photo / Duncan Brown ?? Sheep farmers are vulnerable to high temperatur­es as well as soil moisture loss.
Photo / Duncan Brown Sheep farmers are vulnerable to high temperatur­es as well as soil moisture loss.

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