OPINION: By farming more efficiently, Canterbury dairy farmers have made a massive contribution to the dairy industry and the wider New Zealand economy, especially over the last few years.
We know this because of the DairyNZ Economic Survey, which has provided economic analysis of key financial data from dairy farmers since 1963-1964.
The survey is a powerful tool and, in this 50th year, it provides a good opportunity to look back on our past to better plan for the future.
The past four to five years have been very good for generating high profits in Canterbury, compared to the rest of the country, and it's been done through farming more efficiently. Reliable irrigation is a real benefit, particularly when parts of the North Island have struggled with droughts in recent years.
The dairy industry's growth has been phenomenal, particularly in the 1990s and 2000s, and Canterbury has played a major part. The number of cows milked in Canterbury has increased from just 37,000 in 1990 to 826,000 today - an increase of around 34,000 cows per year.
Canterbury now milks 17 per cent of the national herd. This growth has contributed to the national increase in production of 4 per cent per year. In fact, milk production in Canterbury has increased by 14 per cent per year since 1990 to 321 million kilograms of milksolids. The increase has boosted rural communities by providing large flow-on impacts to a wide range of industries and providing many new jobs. Export earnings from dairy commodities are approaching a third of New Zealand's total merchandise trade.
So, what else has changed?
The strength of the survey is that it tells us what is happening over the entire farm; it paints a picture of infrastructure changes, the number of staff employed and the effects of outside influences like the seasonal conditions, milk prices, livestock values and key input prices such as feed and fertiliser. Essentially, what the economic survey data over 50 years shows us is that dairying is more successful and critical to the New Zealand economy than ever before, but that is becoming a tougher, more complex, and riskier business to manage.
Farm managers are required to have different skills than what was required in the past. New rules and regulations to farm within nutrient limits will bring more challenges and put more pressure on the industry to remain competitive internationally.
A lot has changed since the first economic survey was published by the New Zealand Dairy Board.
For example, in the 1960s, the average dairy farm milked 75 cows, mostly jersey, on about 50 hectares. Cream was separated and stored in cream cans, while the skim milk was often fed to pigs. Technology, including transportation of milk, dairy sheds, machinery, quad bikes, irrigation, telecommunications and the use of computers, has all changed since then. As a comparison, the average Canterbury dairy herd now milks 790 cows on 227 hectares.
* Matthew Newman is DairyNZ's senior economist.
- The Press