Speaking at the DairyNZ annual meeting in Ashburton on Thursday Spaans said dairy farmers’ ability to ensure a long-term, sustainable future would be the driver to remaining internationally competitive.
“Even with lifts in the milk price, volatility will no doubt continue to be a risk,” he said.
New Zealand, with a well-established dairy infrastructure, was a long-time player in the global industry.
“We must take the opportunity as an industry to stay internationally competitive and be more productive and profitable so when we can get out the other side we will be in better shape,” Spaans said.
Like farmers, DairyNZ had tightened its belt while working hard to deliver more value than ever for farmers.
“Lower milk prices have meant reduced volumes and therefore reduced levy income into DairyNZ.
“But despite lower income the DairyNZ board and management have been committed to ensuring we still achieve our long-term strategic plans while continuing to deliver immediate support to farmers.”
Milksolids levy income at $67 million was down $1m on 2015.
Chief financial officer Aaron Beveridge said it had been a challenging year for the research body that had been forced to make some internal changes to address a $3.1m loss.
Spaans said the next season would continue to be challenging for dairy farmers as they continued to focus on operating under the low milk price.
“The goal to support profitable farm systems has not changed.
“Being more efficient and utilising pasture is key to locking in the gains in operating costs as milk price moves to a more sustainable level.”
In the coming year DairyNZ would be refreshing strategy for sustainable dairy farming and the board was keen to get farmer feedback on the future direction of the industry, Spaans said.
Key initiatives in the next year would include progress on establishing the Southern Dairy Hub in Southland and the Lincoln Hub in Canterbury, which would deliver innovative, industry-led, agricultural research and educational opportunities.
Even though farming had become more complex, the need to be competitive and farm responsibly remained the firm focus of DairyNZ.
“We need to ensure consumer expectations are not only met but exceeded, including farming responsibly by maintaining high animal welfare standards and farming within environmental limits.
“We must also attract talented people into our industry and provide positive work environments,” Spaans said.
The reduction of greenhouse gases remained firmly on the DairyNZ radar as it invested in science and research.
Chief executive Tim Mackle said delivering on industry targets in the coming year would see investment into research and development reach almost $20m while $6m had been tagged for attracting talented people into the industry.
Key objectives in the farm profit sector would be boosted by $16.5m in the next year, aimed at extending the focus on growing and fully using pasture and home-grown feed to improve the profitability of dairy businesses.
That included developing tools and support packages for businesses contemplating a change in the level of intensification.
Mackle said biosecurity was a growing issue with processes in place and a budget of $16m tagged to evaluate key biosecurity risks to dairy.
National prosperity, taking in environmental limit-setting, was a big and growing part of the levy spend.
“We are spending $6m-$7m per year in this space that we weren’t spending two to five years ago. It’s a big increase and big investment and will be continued as industry works with Government and councils to ensure the National Policy Statement for Freshwater Management is implemented and the concerns of dairy farms taken seriously,” Mackle said.
Animal welfare and environmental stewardship were also key areas of growing investment need.
“But this year as an industry we have announced some pretty good results.
“We are not out of the woods yet, by any stretch – we still have a long way to go.
“The success here will be dictated by our people,” Mackle said.
