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Agriculture has always been important to the Central Otago economy and will continue to contribute to future economic prosperity in the region. Development of numerous irrigation schemes throughout Central Otago has overcome the constraints of low rainfall, particularly on valley floor farming systems, allowing diversification away from traditional fine wool production.

Soil fertility levels are naturally high in Central Otago, particularly on the valley floor and in north facing area. Natural fertility and well drained soils make Central Otago the best lucerne growing area in New Zealand. Lucerne provides both stock feed and a cash crop.

There are approximately 500 farmers in Central Otago. Sheep (1.9 million) and cattle (47,000) numbers have remained stable for the past 25 years. Central Otago is well known for Merino sheep studs and production of some of the best wool in New Zealand - low rainfall makes this an ideal climate for fine wool production. Valley floor farming is dominated by crossbred sheep and lamb finishing. Diversification to other land uses such as dairy, deer and cash crops such as grain and lucerne hay is increasing.

Other land uses will continue to evolve in Central Otago. Significant changes are expected to include: increased sales of lucerne hay, expansion of the dairy industry on valley floor farms, deer industry expansion, increased direct marketing, (for example, fine wool farmer owned cooperatives selling direct to consumers), expansion of tourism as a part of Central Otago farming, more intensive farming of areas with access to irrigation and less farming of extensive areas as some ownership is transferred to the Department of Conservation under the pastoral lease tenure review and freeholding process.


Central Otago is renowned for being one of the best wool growing areas in New Zealand. The clean Central environment is a significant advantage in a market which increasingly demands environmentally appropriate goods. Access to exceptional quality stud Merino stock, levels of expertise in the region and fewer animal health problems in Central Otago than in many other areas of New Zealand are key to the success of this industry locally.

Merino wool, in particular, will increasingly be recognised as a quality product and marketed in niche markets. More farmers will invest in the wool processing industry with closer contact with final consumers. With that vertical integration will come premium prices for Merino wool. Valley floor properties are likely to diversify away from sheep farming, with less crossbred wool production expected from these properties in future.

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