The new group will be launched next week.
The Meat Industry Action Group (MIAG), which tried unsuccessfully to force reform three years ago, is planning to disband.
Silver Fern Farms chairman Eoin Garden said yesterday he had been told 42 mainly irrigated Canterbury arable farms and 22 farms in Otago and Southland were being converted to dairying or the process was about to start.
But, of more concern, were indications a further 200 farmers were considering converting in subsequent years, renewing a trend which had gone quiet in the last few years due to the economic recession and tight credit markets.
Mr Garden said the statistics added pressure to the meat industry to change its business model, from one he said was driven by the need to source stock to keep plants working to one focused on supplying what consumers wanted.
He said he understood farmer frustration at low sheep and beef incomes, adding that people leaving the industry sent a message it was in trouble.
Dairy NZ figures show that in 2007-08 there were 729 dairy farms in Canterbury and 1041 in Otago-Southland, but a year later there were 846 in Canterbury and 1264 in Otago-Southland.
A Fonterra spokesman declined to reveal farm conversion forecasts but said its new drier at Edendale and a new powder plant at Darfield in Canterbury were built to handle new production.
Three years ago, the MIAG galvanised sheep and beef farmers to rise and demand industry consolidation, but that failed to happen and the group would now go back to members to decide its future.
"If significant support is not forthcoming, the executive agreed that MIAG should be wound up," the group executive said in a statement.
The MIAG also announced a new group had been formed to reform the meat industry but it had its own ideas for industry reform.
MIAG executive member Keith Milne and another group leader, John Gregan, have both shown their displeasure at meat-industry performance by converting their farms to dairying.
Mr Milne has leased his 170ha Otautau property in Southland to a neighbouring dairy farmer and Mr Gregan is milking 750 cows on his farm near Waimate.
Three years ago he had 7500 ewes but now he has none.
