A recent report indicates that struggling sheep and beef farms across New Zealand may increasingly convert to pine forestry as a means of maintaining profitability while meeting net zero greenhouse gas emissions targets by 2050.

The ‘Why Pines’ report, part of Our Land and Water’s National Science Challenge, suggests that to achieve these targets, around half of each sheep or beef farm might need to be transitioned into carbon forestry.

This conversion appears appealing due to pressures on farm profit margins and increasing environmental regulations. However, Federated Farmers, lobby and advocacy group for NZ farmers, views this trend as alarming, with some Waikato farmers expressing fears of being ‘the last farmer left on the road, surrounded by trees’.

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Despite these concerns, some like Waikato farmer Jon Sherlock, are already planning to convert steep terrain on their farms to forestry while continuing to farm around these areas.

Bill Kaye-Blake, the report's lead author and principal economist at the New Zealand Institute of Economic Research, highlights the significant trade-offs involved. While converting farmland to pines could lead to cleaner water and reduced nutrient runoff, it may also have unintended environmental impacts, as seen with the damage caused by forestry slash during Cyclone Gabrielle, causing an estimated NZ$13.5 billion in total damages.

The report reveals that in areas like Hawke’s Bay’s Tukituki catchment, up to 75% of pastoral farmland might need to be converted to pines to meet environmental standards and remain profitable. This trend is already underway, with many farmers opting to sell their farms for forestry conversion due to its financial viability.

Kaye-Blake notes that while forestry and carbon farming currently seem beneficial, further research is necessary to understand the long-term implications, especially regarding the demand for logs. He also suggests that better marketing of New Zealand’s grass-fed beef could potentially improve the returns for meat and wool, offering an alternative to conversion.

Farmers like Sherlock are cautiously optimistic about integrating forestry into their land-use strategies, provided the Emissions Trading Scheme remains strong and profitable.

However, there is widespread concern about the loss of traditional farming communities and the challenges of complying with strict environmental regulations. Sherlock emphasises the need for a more supportive approach from the government, with positive incentives rather than penalising measures, to encourage environmental improvements on farms.

Overall, the report paints a challenging picture for New Zealand’s sheep and beef farmers, who are directing a difficult landscape of both economic pressures and environmental responsibilities.