The expansion of the New Zealand (NZ) dairy herd since the early nineties has resulted in significant land use changes.

Since 1990-91 pastoral land for sheep and beef production has been declining and is expected to have fallen by 29 percent or 3.6 million hectares, by 2012-13. Of this fall, 845,000 hectares (23 percent) will have been switched to dairy production (to 2.18 million hectares in 2012-13) and the remaining 2.7 million hectares will be lost to other land uses such as forestry, conservation, urban encroachment, viticulture and horticulture.

As a result of these land use changes and persistent drought conditions in 2008, export lamb slaughter in 2008-09 is expected to decline 23 percent on-year, to 20.3 million head, with some recovery expected in 2009-10.

Similarly, export sheep slaughter is forecast to fall 42 percent in 2008-09, to 3.6 million head, while export cattle slaughter is forecast to ease 6 percent, to 2.05 million head.

Meat and Wool New Zealand attributes 60 percent of the decline in export livestock slaughter in 2008-09 to the 2008 drought, with 40 percent due to the expansion of the dairy industry.