2008 tasmanian dairy conference burnie, 8 th october 2008 south island (nz) dairy industry...
TRANSCRIPT
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2008 Tasmanian Dairy ConferenceBurnie, 8th October 2008
South Island (NZ) Dairy Industry Development
Richard Christie – Executive Director, South Island Dairying Development Centre
S I D D C – Partners networking to advance South Island Dairying
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SIDDC PartnersSIDDC PARTNERS
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South Island milk from 7% to 35% of NZ total in 17 South Island milk from 7% to 35% of NZ total in 17 yearsyears
South Island Milk as Percentage of National Milk
7.4
%
9.6
%
11
.7%
13
.2%
15
.2%
16
.5%
17
.3%
19
.4%
22
.0%
24
.0%
23
.3%
26
.5%
28
.0%
29
.2%
30
.3%
31
.1%
32
.1%
35
.1%
92
.6%
90
.4%
88
.3%
86
.8%
84
.8%
83
.5%
82
.7%
80
.6%
78
.0%
76
.0%
76
.7%
73
.5%
72
.0%
70
.8%
69
.7%
68
.9%
67
.9%
64
.9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
NI %
SI %
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New Zealand Milksolids Growth
0
200
400
600
800
1,000
1,200
1,400
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
kg M
S (
mill
ion
s)
North Island South Island
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South Island Milk Growth
0
50
100
150
200
250
300
350
400
450
500
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
Milk
solid
s (
mil
lio
n k
gs)
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FACTORS FOR SOUTH ISLAND GROWTH
• Processors wanting to grow• Suitable land• Well priced land• Sizeable properties• Expansion opportunities with adjoining land• Wintering land options• Reliability (rain or irrigation)• Low share structure of industry (initially)• Attracting the entrepreneurs and the
corporations
S I D D C – Partners networking to advance South Island Dairying
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FACTORS FOR SOUTH ISLAND GROWTH
• North Island migration south, plus international• Large farms give a range of equity possibilities:
– For farm operator– For investors
• Loans readily available• Income and capital appreciation driving
continued expansion of the new entrants• Share revaluations• Westland model
S I D D C – Partners networking to advance South Island Dairying
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THE SHAPE OF SOUTH ISLAND DAIRY FARMS
• Largest herd sizes • Flat milk curve• Employment of staff• Corporate farms• Equity partnerships• Individuals with multiple properties• Culture of expansion and risk taking• Developing into areas not traditionally regarded
as suitable for dairying
S I D D C – Partners networking to advance South Island Dairying
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South Island Dairy Regions 06-07
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CURRENT SOUTH ISLAND POSITION
• 2,400 herds & growing at +100 per year (21% of NZ dairy herds)
• 1.24 million cows & growing at 100,000 per year (31% of NZ dairy cows)
• 430,000 ha dairy platform & growing at 20,000 ha/yr (30% of NZ dairy land)
• Average herd size 525 cows (North Island = 305 cows average)
S I D D C – Partners networking to advance South Island Dairying
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LIMITS TO GROWTH
• Service industry support• Availability of skilled and unskilled staff• Ability to borrow• Cost structures• Suitable land:
– Water– Winter support land
• Environmental Constraints– Water– Nutrient loss– Resource Management Act processes
• Cost of land in South Island verses other opportunities– Tasmania, - Uruguay, - USA, - Chile
S I D D C – Partners networking to advance South Island Dairying
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Land Price $NZ/kgMS
Waikato Canterbury Southland
Sept 2006 43 26 25
Sept 2007 47 31 33
July 2008 57 33 40
Change +33% +29% +60%
Agrifax
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Lincoln University Dairy Farm [LUDF]
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Southland Demonstration Farm
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SI Dairying Development Centre
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LUDF StructureSIDDC Executive Director
LUDF Management Team
Farm Manager
Business Consultant
DairyNZ Developer
LUDF Business Advisory Group [BAG]
Farm Staff
Herd Manager
Dairy Assistants [3]
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LINCOLN UNIVERSITY DAIRY FARM
• LUDF conversion in 2001-02, 680 cows, 161 ha platform, centre pivot irrigators
• SIDDC Partnership to manage farm and leverage capabilities
• Research, extension, education, training for South Island dairying
• Best practice commercial demonstration farm• Targeting top level production with low
environmental impacts
S I D D C – Partners networking to advance South Island Dairying
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WHAT PRODUCTION IS LUDF ACHIEVING?• 2002-03 1,414 kg milksolids/ha• 2003-04 1,684 kg milksolids/ha• 2004-05 1,719 kg milksolids/ha• 2005-06 1,771 kg milksolids/ha• 2006-07 1,703 kg milksolids/ha• 2007-08 1,744 kg milksolids/ha= sustainable high production• Canterbury Ave = 1,223 kgMS/ha (LUDF +39%)• NZ Average = 934 kgMS/ha (LUDF +82%)
S I D D C – Partners networking to advance South Island Dairying
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Visit www.siddc.org.nz Website
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Southland Demo Farm
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SDF farm walk notes
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Lincoln University Dairy Farm - Farm Walk notes Tuesday, 30th September 2008
7. The target line is at the average cover for our budgets for today which is 2200 kg DM/ha on the milking platform and our actual is 2166 kg Dm/ha.
8. The wedge now has a target line that reflects the pre-grazing target for a 21 day
rotation, feeding an average of 16 kg DM/cow (includes springers) at a stocking rate of 4.3. (4.3 x 21 x 16) + 1480 = 2929. This is a slight increase in allocation. No silage has been fed this week.
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KEY REQUIREMENTS FOR DEMONSTRATION FARM
• Commercial in approach and at a scale matching the district• Key people – skilled, committed, champions• Data collection - ongoing• Transparency of information• Current information – weekly web updates (farm walk notes)• Focus days that farmers want to come back to• Relevant and leading (cutting edge – not bleeding edge)• New technologies being integrated into practical farm management• New projects• Research carefully integrated and non-intrusive• Able to cope with visitors• Correct structure
– Full control of farm management and capital – Management team operating under policies– Committees (and scientists) don’t run farms – Strong input from leading farmers
S I D D C – Partners networking to advance South Island Dairying
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WHAT IS OUR RESOURCE USE EFFICIENCY?
IRRIGATION• M Appl Sc thesis, 2008• Detailed study of farms regarded as 10 of best in
Canterbury for conversion of water to milk• Centre Pivots most effective• LUDF water conversion efficiency 70% higher than
the average of the 10 farms• Obtained in part by utilisation of technologies such
as Aquaflex
S I D D C – Partners networking to advance South Island Dairying
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WHAT IS OUR RESOURCE USE EFFICIENCY?
• IRRIGATION
S I D D C – Partners networking to advance South Island Dairying
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GREENHOUSE GASES– RESULTS from LUDF using eco-n
• So are we good or bad?
S I D D C – Partners networking to advance South Island Dairying
LUDF Typical LUDF Typical
Total 7.85 9.92 15.65 10.34% difference -21% 51%
Tonnes of CO2 equivper tonne MS per hectare
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EMISSIONS TRADING IMPACTS
S I D D C – Partners networking to advance South Island Dairying
Table 3 Emissions Trading Scheme Farm Costs
Emission Source Allocation of 90% of 2005
Emissions Full Price of Emissions
Carbon price > $15 $25 $50 $15 $25 $50
Methane emissions $1,860 $3,105 $6,205 $18,615 $31,030 $62,055
Field nitrous oxide emissions $1,150 $1,915 $3,825 $11,480 $19,130 $38,265
Total Farm Carbon Cost $3,010 $5,015 $10,030 $30,095 $50,160 $100,320
Eco-n Carbon Credit $4,045 $6,740 $13,480 $4,045 $6,740 $13,480
Total Farm Carbon Cost Using eco-n
-$1,035 -$1,725 -$3,450 $26,050 $43,420 $86,840
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WHAT IS OUR RESOURCE USE EFFICIENCY?
6-years of monitoring drainage water shows low nitrate leaching losses (< 22 kg N/ha/y)
North Block lysimeters South Block drainage plots
S I D D C – Partners networking to advance South Island Dairying
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WHAT IS OUR RESOURCE USE EFFICIENCY?
0
10
20
30
40
50
60A
mo
un
t o
f n
itra
te l
each
ed (
kg N
/ha)
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Average
Lincoln University Dairy Farm North Block Lysimeters
50 mm
300 mm
140 mm
140 mm
120 mm
107 mm
INTERIM DATA
114 mm
Yearly variation shows need to use multi-year average values rather than a single year result
S I D D C – Partners networking to advance South Island Dairying
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Thank you