Dave McGaveston's 600-cow Tapawera dairy farm pays the mortgage on his sheep and beef operation near Nelson, yet he remains fiercely passionate about the meat industry and the need to retain diversity in New Zealand's agriculture.
He farms 600ha that stretches over river flats and terraces before rising abruptly to hill country that burns off in summer and has few options apart from sheep. Not that he's complaining. They may not pay as many bills as he would like, but the fact he's an executive member of the Meat Industry Excellence (MIE) group determined to change the returns for sheep and beef farmers is a sign of his commitment to and belief in an industry that does not even come close to dairying returns.
He couldn't ignore higher dairying returns on investment though, which is why seven years ago he bought a 270ha dairy farm with plenty of potential at Inangahua on the West Coast, 130km away.
"I wanted to use some of the equity here in Tapawera to generate a better income than I could in sheep and beef,” he says.
“I didn't want to sell the Tapawera farm, so I bought the dairy farm with 100% borrowed money. It was the only farming business I could buy that could service that debt. I'd looked at commercial buildings etc but they didn't have the returns."
He spent the first spring on the dairy farm coming to grips with dairying and the farm itself before taking on lower-order sharemilkers to run it. Today production from a milking platform of 230ha – with the remainder left in native bush – has lifted from 137,000kg milksolids (MS) to 220,000kg MS. The kiwicross herd is milked once-a-day for four to five months of the season to suit the needs of the sharemilkers' young family as well as to put less stress on the cows.
Meanwhile the flat country of the sheep and beef farm is used to maximise milk production on the dairy farm. Today he runs 3300 Romney-cross ewes on the steep hills, finishes 150 dairy-beef-cross cattle each year that were bred on the dairy farm, has up to 50 nurse cows from the dairy farm with three to four calves mothered onto each of them, grazes replacement stock for the dairy farm, winters the dairy herd and produces all the supplements for the dairy farm.
Though each farm is run as a separate business, with the dairy side paying market price for grazing and supplements, the two come together at the end of the financial year. Two years ago the sheep and beef side of the business made a $220,000 loss and the dairy side helped balance the books.
While the gross return on his dairy is about 20% on capital, the sheep and beef is a mere 7%. Economically, he acknowledges sheep simply don't stack up against dairying. Current meat and wool prices give a return of 19.5c/kg drymatter (DM) for a top breeding ewe farm finishing all lambs, compared with carry-over cows with no capital outlay on stock cleaning up on hill country at 23.8c/kg DM, and an average dairy farm with 95 days dry and 270 days in milk at $6.50/kg MS returning 44c/kg DM.
Yet McGaveston is determined to persevere with sheep and believes there is a future for the industry.
He could sell off the flat country at Tapawera for horticulture or convert it to dairying, but without the balance of country, the steep hills would be of little use.
"I don't think it's healthy for New Zealand to be one big dairy farm,” he says.
“As a country, we don't have much in the way of minerals resources such as Australia, so we rely heavily on primary production.
"Is it right to end up as one big dairy farm? I believe we need a balance. You only need to look at the botulism scare. If that had been for real it could have bankrupted our country."
So instead of putting both feet in the dairy camp, he's keeping one firmly planted in sheep and beef while taking on an active role to drive change in the meat industry. And though many dairy farmers view meat as a byproduct, McGaveston points out bobby calves, dairy-cross beef and cull cows are a substantial part of the beef industry. Yet unlike milk, prices paid to dairy farmers for those cattle are based on processing capacity use rather than market-related, he says.
The meat industry has multiple sellers with under-use of processing capacity and he says the goal of the MIE group is to create a farmer-controlled vertically integrated entity with sufficient critical mass to optimise returns for all stakeholders and to recruit the best personnel to manage it.
Previous attempts to bring Alliance and Silver Fern Farms together have failed, but McGaveston says MIE managed to lift shareholders voting participation in both co-operatives to unprecedented levels, with all three MIE-endorsed candidates elected.
"This is the first stage in ultimately changing the hierarchy and bringing the industry together whereby it can then concentrate on being market-led rather than procurement-driven.
"The dairy industry could give the meat industry direction. Pre-Fonterra, NZ dairy farmers got just on half what UK dairy farmers got for their milk. Today they're getting slightly more. In the meat industry we get about half what the UK farmers are getting, so with the right structure the opportunities are there."
In the meantime, he uses the flat country of his sheep farm to grow as many kilograms of DM for his dairy operation as possible.
The climates are vastly different between Tapawera and Inangahua, with the latter getting well-irrigated naturally with a 3m annual rainfall on ground that drains well. At Tapawera, the rainfall is between 1200mm and 1500mm and not well spread through the year. Dry periods can be long and a photo on his wall shows paddocks in drought that look like bare soil.
“For four months of the year we can grow nothing here because of the lack of water,” he says.
With water, it grows grass and grows it well, so 50ha of flats are now irrigated via K-line or rotorainer and another 70ha proposed with centre pivots. On one chunk of irrigated flats, he plans to install a fixed grid (also called solid set) system because of trees and power lines, though he wants to do it without posts.
It's still a feasibility study, but he's thinking of using pop-up sprinklers similar to those used on sports fields so he can easily cut and carry supplements produced from the paddocks for the dairy farm. He acknowledges it would be the most expensive way to irrigate, but would have the benefit of less wear and tear.
Cows from the dairy herd are trucked to the Tapawera farm as they dry off, with 640 heading back to Inangahua last spring as they were springing. They were trucked in small numbers as a back load on the bobby calf truck. The bulk of the cows' winter feed is 50ha of crops including swedes, kale, and rape. He's also been growing the new Marco turnip which is a summer variety, but he's sown it after a grain crop and is grazing it from June 1 with yields of 1200kg DM/ha. Winter crops provide up to 9kg DM a day per cow for the herd, with a further 5kg DM of barley straw.
“Cows get a ration of barley straw every morning and then go onto crop,” he says.
“We can usually put on half a condition score in the first month and the later calving ones will keep putting it on. Some dairy farmers have a really strong view that you can't put the weight on a cow after they dry off, but I would have to argue that. It might be the climate we have here and we have free-draining land and it's easy to give them a spot to stand off. Plus the high metabolisable energy (ME) level of the crop.”
He grows 30-40ha of barley each year because it suits the rotational cropping regime for the dairy herd, selling the grain and using the straw as feed through winter. He also grows about 1200 bales of high-quality lucerne balage and hay. Balage is expensive, but it gives him options to truck it to the dairy farm if needed during feed shortages, or sell as surplus.
For the dairy replacements and dairy beef on the Tapawera farm, he makes up to 1500 tonnes of pit silage each year to feed out during the long summer dry, with some fed to the ewes as well.
As well as 140 dairy heifer replacements on the Tapawera farm from weaning, 150 dairy-cross calves are grown on, with some sold at six months and the bulk finished between 18 months and two years. There are also about 50 nurse cows with their three to four calves. The best of these cows will rear calves for three or four years, compared with their other option as cull cows to the works, he says.
The dry cows have also done a good job cleaning up the hills and contrary to the view that dairy cows struggled on steep hills, he has seen them grazing to the very top of substantial, steep hills.
The fertile flats rear 800 replacement ewe lambs and finish the remainder of the lambs. In a good year he's reached lambing percentages of more than 150%, though autumn droughts have knocked that back considerably in recent years. From lambing to weaning, sheep are set stocked on the hills and that's the only option, making it difficult to feed them well if it turns dry through that period.
“I know what the cows are doing every day of the year and if you don't feed them, well you know at the next pick up,” he says.
“That's our Achilles heel with sheep; the only way you measure them is if you bring them into the yards and weigh them or kill them.”
The challenge is also one of the appeals of the red meat industry though and the belief that structural change will ultimately reap rewards.
“It's an exciting industry to be in because it can only go up.”
KEY POINTS
Owner: Dave McGaveston
Farms: 600ha sheep, beef, dairy support at Tapawera, south of Nelson and 270ha dairy farm at Inangahua, West Coast (230ha milking platform)
Stock: 640 dairy cows, plus replacements, 150 dairy-cross for beef, 50 nurse cows, 3300 breeding ewes
Crops: 50ha of swedes, kale, rape and turnips, 30-40ha of barley, 1200 bales of lucerne
Dairy production: 220,000kg milksolids (MS).
