Planting carbon forests on New Zealand farms is adding to the price of meat

New Zealand meat is expensive, and most people blame the farmer, the supermarket or the weather. There is another reason that gets far less attention, and it starts with a policy almost everyone thought was a good idea. To fight climate change, the country has spent the past few years paying people to plant trees, and some of the best places to plant them turned out to be working sheep and beef farms.

Swap a hill-country farm for a block of pine and the carbon stored in the trees can be sold. When the carbon price was high, that deal was worth more than the lambs and cattle the land used to produce. So whole farms were sold and planted, the stock went to the works, and a small but steady slice of the country’s food-growing capacity disappeared under permanent forest.

It is a textbook unintended consequence. A rule designed to cut emissions has quietly added to the cost of meat. And the awkward part is that the people most worried about climate change are often the same people most worried about the cost of living, so this is one problem where fixing one side can make the other worse.

The carbon deal that changed the maths

New Zealand’s Emissions Trading Scheme lets foresters earn carbon credits for the carbon their trees soak up. A company that needs to offset its emissions buys those credits, and the money flows back to whoever owns the trees. Plant fast-growing pine and walk away, and the land becomes a long-term carbon factory rather than a farm.

For a few years the numbers were lopsided. With the carbon price peaking near $88 a tonne in 2022, a hectare of permanent pine could earn more than the same hectare running sheep and beef, especially on harder hill country where farming margins are thin. An investor doing the sums did not need to like trees. The carbon return alone made the purchase pay.

That is the engine behind the conversions. Not a sudden love of forestry, but a price signal that made growing carbon more profitable than growing food.

How much farmland has gone

Beef and Lamb New Zealand estimates that somewhere between 261,000 and 350,000 hectares of sheep and beef farmland has been converted to forestry since 2017, taking around 2.5 million stock units of production with it. As a rough rule, every 100,000 hectares of pasture lost to pine is about a million sheep no longer farmed. On that basis the conversions so far represent roughly three million sheep worth of food production, gone.

It is important to be fair about the scale. This is not the main reason New Zealand has fewer sheep. The national flock has fallen from a peak of 70 million in 1982 to about 23 million today, and most of that long decline came from dairy conversion, urban growth and decades of farms chasing better returns. Forestry is the newest pressure on top of an old trend, not the whole story.

But a few hundred thousand hectares still matters, because it is permanent. A farm that becomes a dairy unit is still growing food. A farm that becomes a carbon forest is out of food production for good, and the loss compounds every year it stays in trees.

Why fewer sheep means higher prices

Less land farming stock means less lamb and beef produced. New Zealand sells most of its meat overseas, and the domestic price tracks the world price, so anything that tightens supply pushes prices up at home as well as abroad. Take productive land out of the system permanently and you raise the floor under meat prices for decades.

This needs an honest caveat. Afforestation is not why your roast costs what it does this winter. Today’s high beef and lamb prices are driven mostly by global forces, with Australia rebuilding flocks, the United States short of cattle, and world protein supply tight. Tree planting is a slow structural pressure layered on top of those bigger swings, not the headline cause.

The point is that it works in one direction only. Every other driver of meat prices goes up and down with the cycle. Land locked permanently into carbon forest does not come back when prices fall. It is a one-way ratchet on the country’s capacity to produce food.

The trap for climate-minded voters

Here is where it gets uncomfortable for anyone who cares about both the planet and the price of dinner. Carbon forestry is sold as climate action, and planting trees does store carbon. But the same policy quietly raises the cost of food, hits rural employment, and lets big emitters keep emitting as long as they pay someone to plant pine.

So the climate goal and the cost-of-living goal pull against each other. Push hard on cheap carbon offsetting and you get more pine, fewer farms and dearer food. Protect food production and rural towns and you take away one of the cheapest ways for the country to hit its emissions targets. There is no version where both win completely.

Why almost everyone is turning against it

The interesting twist is that opposition to wholesale carbon planting now spans the political spectrum, for different reasons.

On the environmental side, blanket exotic pine is not the win it first appears. It is a monoculture that does little for native biodiversity, it carries real fire risk, and the debris left after harvest helped cause the destructive slash floods in Tairāwhiti during Cyclone Gabrielle in 2023. Plenty of conservation-minded people now argue that permanent native forest, not plant-and-leave pine, is the climate answer.

On the rural side, the loss is jobs and communities as much as food. Beef and Lamb’s research in Wairoa found that converting local farms could mean nearly 700 fewer jobs and around $23.5 million less spent in the district each year. A forest needs far fewer people than a farm, and the small towns that service farming feel every conversion.

That broad unease has already changed policy. A law capping farm-to-forest conversions took effect on 31 October 2025, and the carbon price has since fallen to around $54 a tonne, below the government auction floor of $71. With carbon worth less and the rules tighter, the case for buying a farm purely to plant trees has weakened for now.

What it means for your grocery bill

For now is the key phrase. The land already planted is not coming back, so the production lost so far is baked in. And the pressure could return the moment the carbon price climbs again, because the underlying maths has not changed, only the price has.

None of this means tree planting is bad or that climate action is the enemy of cheap food. It means the tools matter. Paying polluters to cover farmland in permanent pine turns out to be an expensive way to cut emissions when you count the food, the jobs and the towns that go with it. The lesson is not to stop caring about the climate. It is to be honest that some climate fixes have a price, and that the price can show up at the supermarket.

Sources and further reading

• Beef and Lamb New Zealand, research on land-use change, stock-number losses and the Wairoa afforestation case study.
• Ministry for Primary Industries, the Emissions Trading Scheme forestry rules and the 2025 conversion cap.
• Environmental Protection Authority, carbon price and ETS auction settings.

This piece follows our look at why a record farm export year still means more expensive food, and the two-speed economy on show at a sold-out Fieldays.

Have your say

Have you seen farms near you planted out in pine? Do you think New Zealand has the balance right between fighting climate change and keeping food affordable? We would like to hear how this looks from your part of the country. Share your view in the comments below.

This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂