Since 1990-91 pastoral land for sheep and beef production has been declining and is expected to have fallen by 29 per cent, or 3.6 million hectares by 2012-2013.

A recent Meat and Wool New Zealand (MWNZ) report has revealed of this fall, 845,000 hectares (23pc) will have been switched to dairy production (to 2.18 million hectares in 2012-12) and the remaining 2.7 million hectares will have been 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 23pc year-on-year, to 20.3 million head, with some recovery expected in 2009-10.

Similarly, export sheep slaughter is forecast to fall 42pc in 2008-09, to 3.6 million head, while export cattle slaughter is forecast to ease 6pc, to 2.05 million head. MWNZ attributes 60pc of the decline in export livestock slaughter in 2008-09 to the 2008 drought, with 40pc due to the expansion of the dairy industry.