My wife Vicki and I were lucky enough to spend 4.5 weeks travelling in New Zealand in February and the first part of March. This was partly to visit our son, who was working for Gavin’s, a large agricultural contractor in the Waikato. Forage harvesting grass/ maize and all other aspects of farm work, including land surveying and aspects of managing their goat milking enterprise. We were also able to travel both North and South Island and in doing so, meet up with a large number of people from the farming industry and dairy in particular.
Our thanks to Colin Grainger-Hunt of Dairy NZ and Karl Rossiter of Frontera for their help in putting together our trip and farming experiences.
Over the next few months we would like to record some of our observations in a number of FCG newsletter articles but starting this month with a general observation of the dairy industry and similarities and differences between the UK and NZ and the challenges they face.
We toured dairy farms in the North Island as well as farms in South Island, mainly around the Canterbury Plain where we saw a lot of dairy conversions as well as travelling up the West Coast of the South Island.
It is clear the very successful dairy farming model in New Zealand continues to be exploited by good farmers, keeping costs down, making good returns, even in lower milk pay out years. With milk pay outs having risen, many farmers have adopted higher cost techniques, such as diet feeding, growing maize, making silage, purchasing land away from farm, known as run off, to grow conserved forage and increasing stocking rate. Alongside this, the use of palm kernel as supplementary feed has increased significantly in recent years. This has a big impact for on farm production in many cases.
Issues such as pollution, animal welfare, consumer awareness and pressure, both from the New Zealand population and their dairy markets, will have a huge bearing on the future of dairying in New Zealand. With many regional councils now requiring farmers to store effluent and control pollution, a lot of the farms we visited, were having to go through environmental management plans, to aid the decision making on application of nutrients, especially nitrogen and phosphate, as well as assessing their impact on outflows and potential water course pollution.
The use of palm oil-based products is coming under pressure, both the effect on butterfat quality in milk solids and the same ethical and environmental pressures we are facing in the UK. This could have a significant impact on the profitability of some dairy farms, having built systems relying on this feed. It is an excellent feed, working very well by way of importing dry matter on to a grazing platform.
Whilst there is still a great dairy share farming industry in New Zealand, access to labour is becoming more difficult, we saw a large number of immigrant workers on farms, as it is hard to get kiwis to come into the dairy industry. This is prompting change to the industry and investment, along with changes in practice, switching to once a day milking and changing milking times to make them more social and suitable. This is a common factor in both our countries.
The New Zealand government has commissioned a review of taxation in the country and a proposal to bring in a capital tax, including capital gains tax and possibly inheritance tax, which will have a bearing on investment in New Zealand.
Overall, we came back very impressed with the dairy industry out there, but also recognising its challenges and more optimistic about the future of the UK dairy industry to be able to complete in a global world, where sustainability will be a big factor in the future relationship between farmers and their processors and consumers.