Journal of Animal Science, Vol 75, Issue 2 522-532, Copyright © 1997 by American Society of Animal Science

JOURNAL ARTICLE

Impact of exporting dependence on livestock production systems, industry structure, and research

K. L. Macmillan and A. H. Kirton
Dairying Research Corporation, Hamilton, New Zealand.

From 84 to 93% of New Zealand's annual production from livestock is exported to over 100 markets throughout the world. This export dependence has produced production systems that are low-cost because the Mediterranean maritime climate allows animals to graze outdoors throughout the year without provision for housing and with minimal requirements for cropping, harvesting, and forage storage. These systems exploit the inherent tendencies for ruminants to have annual production cycles that can be synchronized to use the seasonal availability of pasture, but this means that processing facilities must handle peak supply for brief periods. Processing technology can reduce the impact of peaks in supply that may not match market demand. The disadvantages of seasonality in processing costs are outweighed by lower production costs, as well as by the opportunity to manage large numbers of animals per labor unit. Cooperative structures that are owned by livestock producers are a common feature, especially in New Zealand's dairy industry. This continued preference for cooperatives may reflect the need to have a guaranteed processor for a perishable product such as milk, as well as sharing the risk in an export industry that has scant control over prices received. In addition, management systems for ruminant livestock can only respond slowly to changes in market demand because their production cycles last at least 12 mo and only one or two offspring are produced in each cycle. Export marketing of livestock products is complicated by trade barriers and by dumping of subsidized surpluses. Negotiations to eliminate these practices may mean that livestock production systems in many countries will have to adopt some principles similar to those developed in New Zealand, not because of export dependence but because this dependence has created low-cost systems.