YGA Down Under '08: Why are we on a dairy farm again? (Wednesday, Feb. 20, 2008)

Wednesday Feb 20, our next to last day in NZ, was a bit of a whirlwind. We rolled out from the Jailhouse in Christchurch to meet Neil Gow and Bruce Greig at the Lincoln Dairy Farm http://www.siddc.org.nz/ludf.html , http://www.lincoln.ac.nz/story23244.html. Neil is quite the legend in the South Island farming community; he lectured in farm management at Lincoln for over 40 years and has essentially educated two generations of farmers. There aren’t too many things about NZ ag that Neil doesn’t know, or too many people he doesn’t know. His network is pretty incredible – even extending to the US (his son Hamish is currently a professor in the ag economics department at Michigan State). And perhaps most importantly, he was one of advisors during my time at Lincoln http://www.lincoln.ac.nz/. Bruce is originally from South Africa, and has worked with many progressive farms in the South Island, particularly in the dairy sector, before coming to lecture at Lincoln.

Even though no one in our group came from a dairy background, I felt it was really important that we visit at least one dairy farm while in NZ. Why? Because dairying is quite different in NZ compared with PA, and although NZ has traditionally had a reputation for being a country full of sheep, it is increasingly becoming a country full of Fresians (NZ version of Holsteins). Dairy and wine are the current growth sectors for farming in NZ, with dairy undergoing a pretty substantial boom at the moment thanks to historically high international dairy commodity prices. The dairy industry is currently creaming it (ha ha) even with the exchange rate at unprecedented levels. Incidentally did you know that Fonterra http://www.fonterra.com/wps/wcm/connect/fonterracom/fonterra.com/Home/(the mega dairy coop) is the largest company in NZ, and the largest trader in NZ dollars in the world? Quite literally milk is the new gold in New Zealand farming and to really understand ag in New Zealand to have to at least have some appreciation of dairying.

Neil Gow, NZ ag legend...

Lincoln Dairy Farm Pics

So how exactly is dairying in NZ different from PA? For starters, its pasture based and seasonal - meaning the cows graze on their own (as opposed to being fed in barns) and are only milked when the grass is growing (about nine months on, three months off). Here in the South Island, dairy farms are big; a small farm would be 500 cows, but most new "conversions" are in the 1000 cow plus range. Dairying here also offers an interesting path for advancement known as "share milking". Share milking brings together a farm owner and a cow owner (generally a young person just starting out) in a revenue sharing arrangement (usually 50/50) that is beneficial to both parties. The farm owner provides the farm and dairy infrastructure, and the cow owner provides the cows and staffing. In this way young people can start out with very little and build equity as they increase and improve their herds, and move from smaller farms to bigger farms. The eventual goal for a share milker is the move into farm ownership. Finally, dairying in New Zealand is absolutely booming, while back in PA dairying is holding the line at best. The South Island is quickly being a major dairy region with massive areas being converted to dairying. Neil and Bruce told us that land appropriate for dairy farming is currently selling for about $50,000 NZD/hectare ($15,000 USD/acre), cows are selling for $2,400 NZD (they were $1,200 a year ago) and you’ll wait at least 18 months to get a cow shed (milking parlor) even started.

However, the boom in dairying is not all cream. The environmental impact of all these extra cows is really starting to bite in, and nutrient management is a major concern. Even though the cows here are grazing, dealing with what comes out the back end is still a big concern. Also, much of the dairying in the South Island relies heavily on irrigation to keep the grass growing, and it’s far from certain that there’s enough water to go around. Indeed, one of the major public debates right now revolves around a proposal known as the Central Plains Irrigation Scheme. This proposed irrigation project would take water from two rivers during high flow periods, store in a massive reservoirs, and deliver it to 160,000 ha (400,000 acres) of farmland during dryer times. Sounds good on the surface, except nowhere is exactly sure that there’s enough water to do this, and the group that want to build the scheme wants to use eminent domain to acquire the farms where the reservoir will be built – essentially forcibly displacing some farmers for the benefit of other farmers.

Anyhow…enough with the dairy farming chatter. After our discussion and tour at the Lincoln dairy we headed south to visit Murray Stevens http://tvnz.co.nz/view/page/410965/414449 and family. Murray and his wife and son operate one of the largest black currant producing operations in New Zealand with about 65 hectares (150 acres)! The really incredible thing about their farm is the high level of mechanization. Pruning, harvest, spraying, and renovation have all be automated to minimize labor inputs and costs and maximize profit potential. The crop is shipped up the Nelson to be juiced and concerted and eventually exported – mainly to GlaxoSmithKline for use in Ribena. Black currants are a crop we don’t really see in the US (they are actually illegal in some states due to disease and invasiveness concerns) but seeing have this farm makes one think… The Steven’s have also done some interesting "off farm investing on the farm." They’ve built a facility on the farm to house a company called Southern Seeds and also rent the company land for their operations. Southern Seeds does off-season seed line multiplication for northern hemisphere researcher and companies.

Black Currants in the FieldSpecialty Harvesting Equipment

After the Steven’s we had lunch a lunch of "Kiwi pies" at Hillyers – a Lincoln tradition. Pies are a part of Kiwi culture and having a pie is just one of those things you have to experience to really get the full New Zealand experience. Once lunch was over we headed into town (Christchurch) to do some shopping. We actually did a divide and conquer strategy, with Mary taking part of the group in search of knitting wool, while I headed off to a farm supply store (PGG-Wrightson’s) for farm boots. We also hit Untouched World http://www.untouchedworld.com/en/uw/(the outlet of course) and Kathmandu http://www.kathmandu.co.nz/ before going back to jail.

After some quick showers and a change we headed over to Rossendale Winery http://www.rossendale.co.nz/ for a wine tasting and dinner with the proprietor Brent Rawstron. Brent has a great story to tell about taking chances and doing things out of the norm. I won’t spoil it for you, as who knows, some of you reading this blog may to come to NZ someday and want to visit with Brent in person. I’ll just tell you that’s it’s an inspirational story about what can be done when you recognize an opportunity, take some chances and put your mind to making something work. It also involves air freighting beef to Germany, vineyards, and obviously a restaurant. We had a great evening! Neil and his wife Kate joined us for dinner as well as Richard and Mary Stevens and Graham and Sue Williams. Richard is a Senior Lecturer at Lincoln in Horticultural management was absolutely critical in helping me arrange farm visits – thanks Richard! Graham and Sue besides being our "Kiwi Mum and Dad" provided the group with a great orientation to New Zealand upon our arrival.

Wine Tasting with Brent Rawstron of Rossendale