This has been significantly aided by the continued development and adoption of innovative technology and management. These technological developments have one common feature– they generally have a relatively low capital cost and can be easily and cheaply operated.
I’m thinking of things like electric fencing and artificial breeding, and would also include breakthroughs like the herringbone dairy, which although maybe does not initially fit the criteria of low capital cost, would certainly be comparable to that of the walk-through it replaced – and much more so than the modern rotary replacing it.
Other technologies have also contributed steady but less spectacular advances in dairy production and efficiency. There have, for example, been advances in plant breeding, animal health, fertiliser technology, weed and pest control, farm mechanisation, and farm management, notably with the latter, the introduction of computer technology.
The bulk of this innovation has been introduced since the end of World War Two, and there’s no doubt that today’s dairy farm is vastly different from that of 1950. There’s no doubt that big and ongoing changes in technology have created a highly efficient and productive industry that is the envy of other nations and the mainstay of our economy. However when the NZ dairy farmer of today looks at all the onfarm innovations that have been introduced over the last 60 years, and takes great pride and credit in their creation of today’s highly efficient, productive, profitable and dynamic dairy industry, then I seriously wonder if the elephant in the middle of the room is not being totally overlooked.
Let us go back to 1950 again, but this time let us look beyond the farmgate.
From the farmgate the farm’s produce, often only cream in cans, picked up by a flat bed truck, was transported to a small local dairy factory where it was generally converted to butter or cheese, almost exclusively cheddar. A few dairy companies were halfheartedly trying to broaden the product base by manufacturing milk powder. I have childhood memories of having to use this stuff on the rare occasions normal milk was unavailable. I reckon this is where James Bond got his idea, because shaken not stirred was definitely the requirement to get the product dissolved – and a prolonged and vigorous shaking at that. And when it was finally liquefied the taste was poor and nothing like the original.
Most of these products were packed in bulk and shipped to the one major market, the United Kingdom.
Now let’s look at the situation today. The last I heard Fonterra was selling milk products in over 100 different forms in about as many markets. They are the major player in the international dairy market with business, marketing, and joint venture operations scattered across the globe. Their manufacturing, transport, distribution, and marketing operations are highly sophisticated and efficient.
All of this has required a massive input into thinking outside the square, and into innovative technology and research and development, and its implementation and adoption – all downstream from the farmgate. It would certainly not be unreasonable to suggest that these off-farm technological developments have been the major factors contributing to the undoubted success of the dairy industry, compared with the onfarm ones.
It’s my belief that, to a very large extent, continuing advances in science technology beyond the farmgate will hold the key to the continuation and enhancement of the NZ dairy industry, rather than those, while certainly being still important, within the farmgate.
Now to indulge in a bit of crystal ball gazing.
Looking at future onfarm technologies that can or will be developed to improved productivity and efficiency, I see a significant departure from what has gone before. In the past our significant introductions in technology have been low cost and easily adopted. What is increasingly being suggested as the way forward certainly does not meet this criteria.
'From the farmgate the farm’s produce, often only cream in cans, picked up by a flat bed truck, was transported to a small local dairy factory where it was generally converted to butter or cheese, almost exclusively cheddar.'
What I am largely addressing is attempts to meet the challenge of the general degradation of our water quality and the emotive public perception of “dirty dairying”. There is an increasing amount of emotion and misinformation on this issue and I don’t intend to debate it here. Suffice it to say farmers cannot afford to bury their heads in the sand. There’s an attitude that they will have to change or they will have change forced on them.
It’s been suggested that the way forward is to follow a current trend and construct loafing barns and feeding platforms where much of the excreta produced by the stock can be collected and stored, then returned to the land only when soil conditions favour its nutrient retention. This strategy might solve the problem but it will not be the solution industry-wide as it fails badly on the criteria for success outlined above; that of low cost to develop and install and ease of operation.
This being the case, adoption will be minimal. With the current trial at the Stratford Demonstration Farm, where low-cost and intensive dairying systems are being compared, we now have some useful data on the economics of the two systems which can reinforce this conclusion.
In the first year of the trial the low input herd produced an economic farm surplus (EFS)/ha of $1916, compared with $1980 for the intensive herd. In the second year the figures were $1375 for the low input and $1243 for the intensive. There was no clear-cut superiority for either group.
The last season’s results change the picture significantly. The EFS/ha is $4358 for the low-input herd, and $5423 for the intensive herd – a fairly clear cut advantage.
However it’s very important to note that this big increase in EFS from previous years was essentially obtained from the $8.40/kg milksolids (MS) achieved for the year. If this figure is adjusted downwards to $6/kg MS a different picture emerges –an EFS/ha of $1940 for the low-input herd and $1543 for the intensive one. Low cost clearly wins.
Taking the accustomed historic fluctuations in dairy prices, reinforced by their current declining trends, and I will leave it to the reader to deduce whether the longer term direction of the industry should be planned on a $8.40 payout or a $6 one.
But I would suggest that the long term viability, profitability, and competitiveness of the NZ dairy industry will be determined by improvements and innovations in factors beyond the farmgate – more so than those from within it. This includes the whole range of transport, manufacture, product development, and marketing.
And I would further suggest that while gains in productivity and efficiency within the farmgate are certainly possible, definitely desirable, and should be actively pursued, the focus should be on achieving these from improved performance from the individual cow, in contrast with intensifying cow numbers on limited areas. Essentially this is the low-cost versus the high-cost option. The NZ dairy industry has built its success on the former, and should depart from it at its peril.
