This is a great time to be a low input pasture based dairy farmer & it's going to get better!

This is a great time to be a low input pasture based dairy farmer & it’s going to get a lot better.

 Chaotic extreme weather conditions have caused the worst drought (for more than 50 years) across most of North America.The feed shortages will impact on every dairy farmer.
I feel very sorry for those farmers directly affected. Having worked in Australia during years of extreme droughts I know it’s very tough & stressful for both farmers & rural professionals.
 Corn/Soybean & to a lesser extent wheat prices are about to substantially increase. All purchased dairy feed will become very expensive. Low input pasture based farmers who don’t buy feed in will avoid the much higher costs but benefit from the expected higher milk prices.
Expect consumer food prices to increase worldwide as a result of the droughts in North America.

Low input pasture based dairy farmers could well benefit from the world climate chaos.

 To fully benefit of course your farm business should not be dependent on purchased feed. Buying any dairy cow feed will expose you to financial risk. I expect all traded dairy cow feed to rapidly increase in price to levels that make them unprofitable to feed. Extreme weather events are happening more often.
Extreme weather events are also a risk factor for pasture based systems. The world economy is very unstable so exchange rates jump all over the place. This increases the risk of purchased feeds.

I expect milk prices to recover quickly. 

The vast majority of dairy farms in the world use large tonnages of cereal or protein based feeds. So they are very exposed to price increases. The situation in North America is so serious that dairy cows are already being slaughtered as the farmers have run out of feed.

  The Fonterra auction prices have already responded positively 

I’ve just travelled across the USA & Eastern Canada & heard everyone talking about the worst drought in history. The crops I saw were in a very poor state, severely stunted, no cob development & withering under the heat. Crops that normally feed dairy cows, pigs & poultry are a disaster & there will be either a very poor harvest or no harvest at all. Many confinement system farmers will be in serious trouble & it is expected that many dairy cows will have to be slaughtered. 

USA Drought Monitor 

2012Corn (Maize Silage) & Soybean relative yields to historical yields 

Drought likely to impact on all consumers as food costs increase 

The USA & Canada are not the only arable countries to be badly affected by droughts. Argentina & Russia are in drought & West Australia is very dry affecting crop yields. In much of Europe extreme spring time rain & cold temperatures are impacting on maize crop yields.

Feed prices for dairy farmers are about to sky rocket as these extreme droughts impact on supply & demand. I would expect all feed costs to rapidly go up in price but protein prices will be horrendous. Europe is almost entirely dependent on imports of livestock protein feed from either USA or Argentina. 

Speculators are artificially boosting prices 

Third world nations who are dependent on food exports from the USA will be badly affected. The UK Spectator newspaper 18^th August ran a front page article suggesting that rapid increases in food prices often resulted in street riots.

 Food prices & predicting riots 

 Aljazeera TV expect the drought to trigger a food catastrophe  

Sadly rain will be too late for many Canadian & USA farmers. A food crisis won’t help struggling economies either but may force a rethink about crops being used for fuel.

Farm Succession- Start the Crucial Conversation

The OneFarm (www.onefarm.ac.nz) Farm Succession Summit brought 80 NZ & International rural professionals together who all work with farmers on Farm Succession.

 It’s very important that these Farm Family Facilitators, Accountants, Consultants & Solicitors specializing in Farm Succession all work as a team rather than in isolation. 

ANZ Bank data suggests that most farmers believe it is a very important issue to be discussed, planned & implemented yet fewer than 10% have a Farm Succession Plan. 

Many families find it difficult to start this “Crucial & Difficult Conversation” which is fully appreciated as the stakes are high, involving strong emotions & often with differing opinions.

The older & younger members of a farming family need to discuss each member’s dreams, aspirations & the future plans for the farm & their role in the future farm. Ideally all family members should be included in those discussions including daughters in law & sons in law. Daughters in Law are in a particularly unique situation sometimes this makes it more difficult to act or maybe the situation creates a completely new opportunity. http://www.abc.net.au/rural/telegraph/inlaws/information_sheet1.htm   

Often it is these people who initiate the first meetings as the core family finds it very difficult or there is reluctance to start the conversation. It is often better to bring in an outside professional like a Farm Family Business meeting Facilitator who can help families get onto the table the differing opinions. 

Putting real numbers on the table often brings clarity quickly so involving the Farm consultant or Accountant can be very helpful too at this early stage of discussions.

JoAnn Alumbaugh from Iowa, USA, one of the Farm Succession Summit speakers made the point that:-
 “ Communication although essential is rarely easy. Sometimes, it’s most difficult to have meaningful conversations with people about whom we care the most”. Unbiased, objective viewpoints provide much needed perspective & help neutralize conflict.

It’s important to listen carefully to what other family members are saying. Every Crucial Conversation has three core elements:- The stakes are high, The emotions are strong & the opinions often differ. http://www.youtube.com/watch?v=qHRF8q3ltRw  There is another closely related book “ Difficult Conversations- Discuss what matters”  which makes more really helpful suggestions http://www.amazon.com/Difficult-Conversations-Discuss-What-Matters/dp/014028852X A good summary is here in this webpage
http://hbr.org/web/slideshows/difficult-conversations-nine-common-mistakes/1-slide

Lyn Sykes from Australia offered two more books that have been published in Australia to help farming families to plan effective succession plans http://www.grdc.com.au/uploads/documents/Succession%20Guide%201.pdf  And one on families communicating  
http://www.grdc.com.au/uploads/documents/GRDC-CommunicationForFarmingFamilies.pdf

John Baker from Iowa USA wasn’t at the conference but he has courses for farm families at The Beginning Farmer Centre. 
 http://www.extension.iastate.edu/bfc/  watching the youtube  might spark some ideas too.

It is very important to also state that for some farmers, Farm Succession is not an option. These farms maybe too small or not profitable enough to pass on to the next generation. These farmers do have other options which need to be discussed with Farm Consultants, Accountants & Solicitors.

The OneFarm Centre will soon release material coming out of the Farm Succession Summit (on twitter search using the hashtag #farmSuccessionSummit ) including webinars. The Summit was all videoed for website use. Keep an eye on the website www.onefarm.ac.nz

The earlier you start the Farm Succession Conversation the better for all your family & for you too.

On a Dairyfarm...Milk Income Minus Costs = $Whatever...Is totally Unacceptable.

Too few dairy farmers budget and when the milk price is volatile (as it is now) it’s really important. If you don’t you might lose more than just your shirt. You can not & must not be financially dependent on the milk price. That to me suggests that you are operating on thin risky margins.
Farm Business resilience depends heavily on Financial Efficiency, Solvency & liquidity. Some Farm Businesses manage upside risk better than other businesses & these often are not the same businesses that cope well with downside risk. 

We need to focus on our ability to cope with the current decreases in milk price, the sharp increases in feed costs & the highly predictable continued volatility (currency, EU, USA, Oil prices, weather extremes & political instability). i.e. Downside Risk!

Too many simply accept Milk Income Minus Costs = $ Whatever.
 Why? Why would you accept $Whatever? What do I mean $Whatever? I mean simply accepting what ever is left over $$$ at the end of the year. This is totally unacceptable!
 Dairy farmers need to concentrate on those factors that you do have control over within your farm gate. I would hope that in control pasture based dairy farmers aren’t too concerned about the milk price. After all you as an individual have little or no influence or control over milk price. What you do control is on farm spending & the efficiency of resource management & decisions related to spending. 

What I’d like to focus on is that you can control the financial outcomes with control over costs & having clear business objectives & targets. Financial results are pretty much in your court & your business planning. If you don’t have real conviction that you can set a financial target & achieve it year in year out something needs sorting with your farm business management.

 What I do know is that there seems clear evidence (not only in NZ but other dairying nations too) of “systems creep” toward more purchased inputs & cereal based diets & an associated drop off in pasture management skills. 

 So when the milk price drops individual farmers find that they or their system is locked into a higher cost structure & it’s more difficult to adjust quickly to a lower milk price. Along with the extra grain comes extra machinery, feed pads, feed bins, feeding systems & increased borrowing & debt servicing. All this spending occurs during periods of higher milk prices/the good times but the repayments go on regardless of milk price fluctuations.

On many farms there also seems a division of financial responsibilities between partners (which normally would be admirable but not this time).

 One person does the budget (and the books) & the second person does the farm spending. Sadly the second person spends as if there was no budget. It’s purely coincidental ofcourse that on many farms the budgetter & book keeper happens to be female & the farm spender happens to be male…..Yeah Right! 

Both Farm Business partners need to build the budget & budget rules then both partners or team members need to implement the financial plan & make it happen.  

Why Not Budget……. by setting a target for “Free Cash”. Now ring fence that financial outcome as “Not Negotiable”. The Free Cash Target must happen regardless of milk price! Let’s make some assumptions to illustrate the point. Let’s assume that discussions with your business & life partner results in a “Free Cash Target” of $100, 000 being set & ring fenced as being “Not Negotiable”. Free Cash is the amount of cash available for “spending off farm” after all farm working expenses, all fixed costs, household drawings, debt servicing & farm related expenses have been paid. Free cash is not household drawings or school fees.

So start the budget on your spreadsheet by locking in $100k Free Cash outcome. Now work backwards starting with fixed costs then variable costs & lastly milk income to secure the $100k Free Cash outcome which has been ring fenced as not negotiable.

The Budget Process is very different from Milk Income Minus Costs = $Whatever which is completely unacceptable.

 Free Cash Target plus Fixed Costs plus Variable Costs = Farm Income.

This Free Cash Budgeting process should allow the Target Free Cash to be generated each year regardless of Milk Price.
Maybe you start by working out what the reduced milk price will cost your business.
Now reduce your costs by that same amount. This downturn in prices should not be a surprise to anyone....it's been highly predictable & the market signals have been clearly visible & accessible on the web.
Back in 14th October 2011 I wrote another blog on this same page "Dairy Farm Profitability.....All Fur Coats & No Knickers" If you haven't read it you should by scanning down through the pages.
If we are looking for the good news story it's that when grain prices sharply rise the dairy down turn is normally brief.
Free Cash Targets must be Not Negotiable.

 

Young Agribusiness Team from Massey University Competes in China

Massey University(NZ) had a team competing in the International Food and Agribusiness Management Association student case study competition, held in Shanghai,China.

 The competition is in its 7^th year and is held in conjunction with the IFAMA annual forum and symposium. The late "Daniel Conforte" (an inspirational lecturer at Massey University) had a long standing association with IFAMA and at the opening of the Symposium was made a fellow of IFAMA the highest honour, a well deserved tribute recognising his passion and contribution to the organisation. 

Sending a team to the case study competition had been a dream of Daniels since his arrival at Massey. This year he was to be co-chair of the competition and was the author of the case highlighting his dedication to the students and passion for the case study method of teaching.

 The competition this year consisted of 17 teams from 6 countries including: United States, New Zealand, India, Canada, The Netherlands and China. On Saturday afternoon each team was issued the case: ANZCO addressing the Chinese market. We then had 5 hours in which to read and analyse the case and come up with our strategy for ANZCO. On Sunday we presented our strategy to a panel of 3 judges made up of representatives from industry and academia. Unfortunately we didn’t make it to the top 4, but it was still a great experience for us. After watching the 4 teams present in the finals we decided we had a lot to learn in terms of the ‘wow’ factor of our presentation and ability to really sell something, but academically we were on par with the others. All of our feedback from the judges was positive, as were comments from audience members, which was encouraging.

 Nanjing Agricultural University from China took out the top honours a $500 prize and the offer of an internship for each team member with Novus international (the main sponsor of the student programme). Texas A&M University (USA) and University of Guelph (Canada) were 2^nd and 3^rd respectively.

 As students the opportunity to attend the conference and experience China 1^st hand was amazing. 
 The theme of the conference was the road to 2050: The China Factor. 
Key messages were delivered surrounding sustainability, food safety, food security and investment, so it was a great chance for us to enhance our understanding of these key areas from those on the front line of developments. Getting to talk with students, academics and industry representatives from around the world was pretty special, as we got to meet the people whose articles we constantly reference and others who share similar visions. The passion of IFAMA and the industry for supporting and developing young people in agribusiness is heartening and gives us confidence that we are in a great industry with a very bright future. They are willing to invest time and money in us and include us in their thinking to ensure we learn from past mistakes and continue to move the industry forward.

 Outside the formal conference sessions and in the week following the New Zealand contingent ensured the Kiwi spirit was upheld and shared with our peers from the other parts of the world. We visited many markets in Shanghai including a massive Carrefour supermarket and wet markets, experienced the Bund by day and night, scaled the world financial centre, explored the Yuyuan gardens and French Concession and of course watched the All Black beat Ireland! We met with Fonterra in Shanghai and heard from the head of strategy and growth for China before touring the brand new innovation centre. We got the bullet train (310 Km/h) to Beijing where we meet with Beef + Lamb and New Zealand Trade and Enterprise to hear about what was happening with NZ meat in China. We visited Fonterra’s Yutian Farm and were blow away. As good tourists we wondered through Tiananmen Square and the Forbidden city and visited Olympic park to see the birds nest and water cube. We played soccer on the great wall, explored the Hutongs and meet the Dutch and American’s at the Houhai Lake area. Everyone had a fantastic time but you know the rules, what goes on tour stays on tour!(Yeah Right Sarah.....I can see the photos have been carefully selected....not to give away any secrets...Ed.Tom)

 If any of you ever get the opportunity to do something similar, grab it with both hands. It was truly incredible and mind boggling experience.

This week's blog has been written by guest blogger Sarah Crofoot, a Agribusiness student at Massey University. She was a team member competing in China. Well done Thank you Sarah!

Huge Support on Twitter for The Great Cafe Challenge

Farmers must connect & communicate with city folk. Dairy farmers need to take responsibility for their own Dairy Farming PR. By using twitter we spread the word about the #greatcafechallenge (where farmers are encouraged to take farming magazines into their local cafes or waiting rooms) all round the world to countries like Australia, UK, Ireland, USA, Canada as well as NZ. 

Pasture based dairy farmers (in fact all farmers), here is an opportunity to connect & communicate to urban people & visitors to your farming area. I strongly believe that farmers need to take responsibility for & actually do themselves the Public Relations, connection to & communication with the urban folks.

 “If it’s going to be then it’s up to me”. You cannot nor should you rely on other people or PR agencies to communicate the good news stories about farming & farming families. The positivity will only be seen as genuine if it comes from you the farmers. Sure we have PR agencies within the industry & the agro political groups work hard on our behalf. Yes we have friends in the rural press but farmers need to play a much more positive role themselves. This week on Twitter (social media) we really started the #greatcafechallenge with astonishing results. 

Last week on my blog (see further down the page) I talked about the concept of farmers taking in recent but pre-read farming magazines to their local cafes, coffee houses, waiting rooms (Dentists, Barbers & Hairdressers) to allow & encourage urban people to read & learn about farming, farming issues & to learn more about where & how their food is produced. Let’s share the good news stories about farming! 

Don’t allow a breakdown between urban & country understanding to create barriers that interfere with farmer’s legitimate “social license to farm”. Most rural issues are in fact whole community issues.

I think farmers need to learn how to use Twitter. What is Twitter? Twitter is a micro blogging form of social media. Using 140 characters or less twitter allows you to communicate with the world. Farmers in many parts of the world are very effectively talking not only to other like-minded farmers but communicating directly with the consumers, news agencies, rural professionals & the world. http://en.wikipedia.org/wiki/Twitter  

 In 2007 there were 400,000 tweet messages being sent per quarter. In March 2012 (6^th birthday) Twitter had over 140 million users sending 340 million tweets per day. Go to https://twitter.com/   

Twitter is easy to use & takes very little time send effective messages, photos or tell others about websites that promote agriculture & farming stories. 

Learn how to use twitter. 

http://www.youtube.com/watch?v=SE0uhifkIfs&feature=fvwrel

 

Twitter messages supporting the #greatcafechallenge have been sent by @greatcafechallenge, @alisonfairleigh (Australia), @Fed Farmers(NZ), @ NZCows (NZ), @Farmers Weekly (UK), @PhilipSpratt (Australia), @NYFarmer (USA), @SaraRussellNZ (NZ Young Farmers), @AgChatOZ, @agrichatUK, @Beef & Lamb NZ, @Naked_Espresso (Australia), @Bendigo Talks, @MsHeatherWatson (Canada). (The @ sign indicates that these are Twitter accounts or Twitter Names)

#greatcafechallenge is the campaign to get farmers to take their used/recycled farming magazines into the local cafes or waiting rooms near you. This week I found in Palmerston North great goodwill by the local cafes & retailers towards farmers & farming. They thought it was a great idea to have farming magazines in their reading spaces. Why not….there is only so many cycling or fashion magazines I can read. 

I think it is important that we give the cafes & hairdressers the publicity they deserve for supporting farmers & agriculture. 

A dairy farmer from Carterton, NZ has suggested that we should put a sticker on the front page of the farming magazines that reads “Thank you for reading me. If you take me home please take me to another café next week. Thank you for reading about farming. We want everyone to understand farmers, farming & where your food is produced. Farmers care about our consumers.” Great idea.

If it’s going to be it’s up to you!

 Farmers please take your farming magazines into your local cafes.

 To our friendly Café owners/city retailers & Managers can I say on behalf of my farming friends a huge THANK YOU for supporting your local farmers.

Thank you For Your Support to your local farmers by stocking farming magazines in your cafe or waiting rooms:-

John at Imperial Barber, Palmerston North.

Massey University Student Cafe

Wharerata cafe, Palmerston North.

Sam's Place, Ashhurst Domain, Ashhurst, Manawatu NZ.

Connecting Farm to City...The Great Cafe Challenge!

The Great Café Challenge….What a great idea!
A well-known Australian Rural blogger Alison Fairleigh from Queensland (who often writes & tweets to increase awareness of rural mental health) has thrown out an interesting challenge to all cafes. Why not stock & display rural magazines & newspapers in your café so that your coffee drinkers can read about rural & farming issues. Well informed coffee drinkers help farmers to progress. What a fantastic idea! 
 READ THE BLOG
 http://talkingfairleigh.blogspot.co.nz/2012/06/great-cafe-challenge.html 
Alison also has a number of farmers blogging on her site.

 I was recently looking for a recent edition of a rural NZ newspaper in Paraparaumu & Otaki …..Not exactly Wellington city!….but none of the stores or news agents stocked this particular newspaper. I often think that the rural press might only be talking to farmers. So many rural & farming issues today are in fact NZ community problems or opportunities for change. One of the important aspects of farm sustainability is not only maintaining but building connection to the local community. The divide between those who produce the food & those who consume the food creates problems for farmers. No longer is it smart to say to hell with them “I’ll do my own thing” or what right do they have telling us what to do. 
New Zealand is essentially a rural community & we all live & work in the same community. We all have similar aspirations for family & quality of life. So we need to move forward as one community, debating issues of concern, and expressing differences of opinion, being listened to & trying to understand other people’s points of view. 

This last week this need for farmers to connect came up in two very different forums. At the NZ National Field days the ANZ Bank had a series of seminars.

One of which was about Farm Succession & Farm Governance. The point was very well made from the audience that many of the Governance skills that farmers have, do in fact come from being a member of NZ Young Farmers, Landcare Groups, Lions, The local Rugby Club or Dairy Women’s Network. So the community is a valuable training ground for Governance skills for farmers. 
There are three issues arising from that, firstly young rural people need to actively participate in their local Discussion Groups & clubs. Secondly those Governance skills learnt by chairing or being on the committee of your local group need to be transferred back onto the farm. Separating the roles of Operations, Management & Governance is really important for all farmers. Lastly those Governance skills may need upgrading as it’s an area where there is little formal training.

My second encounter was with a very good example of a dairy farmer (with support from the South Waikato District Council) building a scenic walk along the upper Te Waihou River at Putaruru  http://www.doc.govt.nz/parks-and-recreation/tracks-and-walks/bay-of-plenty/rotorua-lakes/te-waihou-walkway/  
 Stuart & Carol Edmeades have driven this project along the Te Waihou River which flows through their farm. They have involved the school children from Putaruru in the project to increase the environmental awareness amongst the students & their teachers. Each year volunteers have an organised August day of planting more trees along the walkway  http://www.putaruru.co.nz/walkway.html  This extraordinary effort has resulted in thousands of people both local & visitors to the area coming & admiring one of NZ’s most amazing natural beauties and it's on a farm. 
     The Te Waihou walkway project has connected the farmers to the local community & to the urban dweller who is becoming increasingly isolated from the farms where the food is produced. The way in which the walkway has been built allows the walker & schools to connect with the river, numerous native birds & trees and to walk through a modern pasture based dairy farm without interfering with either.

Well done Stuart & Carol, I know this has taken a huge effort & at times courage to drive it forward. The result is amazing! Farmers can live in harmony with nature & contribute to a more beautiful NZ landscape. Stuart even stars in a dairy farm promotion video with Rosie the cow a DairyNZ initiative in schools. Watch Stuart talking to Rosie the Cow http://www.rosiesworld.co.nz/about-farms  



So let’s push for farming magazines in all NZ cafes, barbers & hairdressers, doctors & dentists waiting rooms. Help connect farming & farmers to our urban cousins.

 Join the Great Café Challenge! Lets push for farming magazines in cafes & waiting rooms!

Dairy Growth Strategy might be Flawed

The push for continued dairy farm growth and expansion may not be a desirable path for New Zealand or NZ farmers. The concept that growth always leads to a better outcome is definitely misleading and probably incorrect.
Those advocating a steady growth of say 4% in my view don’t fully understand what they are advocating. They don’t understand the "Exponential Function" a very simple but badly understood piece of arithmetic.
If you are an advocate of the dairy industry growing, watch this very important video.
Watch this YouTube
http://www.youtube.com/watch?v=F-QA2rkpBSY
Those people & industry groups advocating a steady growth of 4% in the dairy industry are in fact advocating a doubling of output in the next 17.5 years. Doubling time = 70 divided by 4% growth per year. That could mean a doubling of the number of cows too. Is that what we either mean or want?
The recent film seen in NZ called “Growth Busters” also seriously questioned the concept that continued growth also led to either better economic or better environmental outcomes http://www.growthbusters.org/about-2/buy-the-film/ 
 So why are we advocating continued growth in the dairy industry in NZ. Part of the reason is clearly that all New Zealanders gain from a strong profitable dairy industry but is that a reason to advocate further growth. Are we now confusing growth with profit.

What is required in NZ is a greater focus on smarter Farm Business Management practices and cost control to increase the profitability & the well-being of farming families & hopefully all New Zealanders will benefit. Dairy farmers are now faced with a lower farm gate milk price and possibly a period of instability both in costs & income. Dairy farm businesses will be vulnerable & must show resilience. Few we are told have greatly reduced on farm debt during the past two years. So the smarter businesses will need to reduce operating costs to maintain profitability.
Expansion if you are not already highly profitable, if you don't know your costs(per litre or per kg MS), if you have excessive debt or if you don't have a clear precise business plan is outright dangerous. We have plenty promoting the upside opportunities but few talking about the downside risks.
At an industry level a call for continued growth means each farm increasing output or more farms being converted to dairying. Continued growth in output can be achieved in two different ways, either with greater inputs (cows, purchased feed or fertilizer) or with less inputs i.e. extracting greater efficiency from the resources currently being used.(pasture consumption & production or feed efficiency use by genetically superior cows).

There is a limit to dairying growth in NZ. Where is that limit & how will we know what that limit is?
Growth is limited with a fixed finite physical environmental resource. New Zealand is a very small country with wonderful pristine natural resources but they are not inexhaustible.
Here I’m talking about good quality land, water, soil carbon & land capability. Historically there are very good reasons why some farms & some land has not been farmed for dairying. Simply adding irrigation water or farm tracks doesn’t necessarily change the soil capabilities. I would argue that few long term irrigation schemes around the world have in the long term either been successful or not been environmentally damaging. Some like in California are now desperately short of available water.
In Marlborough there is no more available water for additional dairy farms.


It is clear that dairy cow intensity (numbers of dairy cows & stocking rates) is linked to nitrate levels & nitrate leaching. I’m not sure we fully understand this relationship with regard to NZ river & stream water quality. The maps seem to indicate a close relationship i.e. the higher nitrate levels are where the higher dairy cow densities exist. So if this is the case now how can we continue to grow numbers of dairy cows without environmental damage? One possible answer is through better on farm management & technical scientific research break-throughs that will reduce the impact & mitigate the damage.
Personally I am concerned that environmental research will not deliver any short term silver bullet answers. The problems are complex & not fully understood yet. It is not easy to separate the impact of farming from the impact of a higher urban population & the impact of towns & cities on the environment. If NZ is to manage & improve the environment everyone in the community must contribute. Is the change in water quality in NZ an “exponential function” of changes that have already happened to dairy cow numbers & practices? (described by Prof Al Bartlett in the video….see earlier in the blog)


There seems to me an unhealthy push to increase per cow production in NZ. There is very good evidence of “Systems creep”. By that I mean farmers moving from Systems 1 & 2 (low input systems) to higher input systems 3, 4 & 5. Why is this happening? Is it peer group driven or debt driven? Often farmers seem unaware they have quietly moved into a more intense system.
 Per cow production on dairy farms is very rarely related to profitability.
This is true on any pasture based dairy farm in the world. NZ is losing the competitive edge of being the lowest cost producer of milk. NZ is no longer the lowest cost producer of milk & we are rapidly becoming like other dairying nations. We seem to be hell bent increasing per cow production. Ask yourself does NZ have a competitive advantage in grain feeding or PKE? No we have a competitive advantage producing pasture. Why are we not concentrating on our competitive strengths & low input simple pasture systems?

Time for a strategic rethink? Time to carefully rethink the direction you are driving your dairy farm business. Time to rethink profitability!What really is the best option for NZ?


I think the dairying growth strategy might be flawed. What do you think?