DairyNZ regional leader for the area Virginia Serra surveyed 60 farmers and 13 consultants and stock agents for her 2013 Kellogg Leadership Programme project with the help of DairyNZ and Beef + Lamb New Zealand. She found regular communication between the stock owner and the grazier, and not a written contract, was considered the most important factor for a good relationship.
With cow numbers in the region doubling in the last 10 years, 850,000 cows now needed feeding during June and July and with future conversions and regional councils’ proposed land use changes, less land could be available in the future.
Past analyses have shown the profitability of dairy support blocks in the region was questionable, as they usually generated a cash loss, but sheep, beef and cropping farmers saw dairy winter grazing as an important source of reliable income.
“So having a good outcome for both parties is very important as dairy farmers need cows to achieve the target body condition at the end of winter and also graziers have to be paid for the job and the feed they have provided,” Serra said.
Dairy farmers and graziers surveyed said a beneficial business relationship for winter grazing occurred when there was good communication, a long-term relationship and regular contact.
“Having a written contract and a formal process in place is important and good practice but they are of little value if the ‘soft’ aspects of the relationship are not addressed,” she said.
Farmers acknowledged it was important that the relationship was a win for both sides in the long term and short-term gains were not the aim. Having clear expectations and communicating them, as well as good monitoring systems, were also important.
Dairy farmers said problems occurred when the grazier didn’t have the skills to feed dairy cows, there were no monitoring systems and crop was incorrectly assessed at the beginning of winter, which was also graziers’ most common complaint.
Graziers also said cows arriving with a lower body condition score (BCS) than expected and not enough communication also caused difficulties.
However, the consultants and stock agents surveyed had different a view.
“The top three responses from this group on the reasons for a successful relationship were having a written contract, using intermediaries in the relationship and having systems in place to do the monitoring.”
Serra said the majority of farmers surveyed did not have written contracts and those who did complained there was not enough detail in them, they were not clear or relevant and farmers did not want to enforce them when things went wrong as it would damage relationships. The large number of rural professionals already involved in winter grazing could assist the industry by promoting what farmers wanted – good long-term relationships, good communication and regular monitoring.
“There were also a few comments regarding the accuracy of the methods used for assessing feed and how different the results were depending on who was doing the measurement. There could be an opportunity for the industry to come together to develop protocols and an accreditation process to ensure that crops are measured in the same way.”
She said adverse weather in recent years seemed to have been handled well by farmers.
“Winter is a risky time of the year and having a back-up plan in place is very important and from the responses to the survey most farmers are prepared to deal with this and both parties seem to be clear on their responsibilities.”
Although paying for winter feed on a per kg of drymatter of megajoules of metabolisable energy was a fairer method of payment, many were still paying per cow.
“This is likely to contribute to not achieving desired outcomes but the inaccuracies in assessing feed are perhaps one of the reasons why farmers are still using this inappropriate method of payment.”
She said another problem identified was prices were set too close to winter which caused budgeting headaches.
“If farmers are focusing on developing long-term relationships, price should not be discussed at the last minute but agreed as early as possible instead but in many cases farmers are not prepared to commit themselves in case the market moves in their favour in the future.”
Supply and demand were identified as the main factor affecting price with dairy farmers complaining graziers saw an increase in payout as an excuse to raise prices. However, graziers wanted to be well paid if they did a good job, regardless of feed availability.
Serra said case studies of successful winter grazing relationships could assist farmers in the future and targeted information days, especially on crop assessments and BCS monitoring would also be beneficial.
“We also need to know where the 850,000 dairy cows in the region are wintered to provide a better understanding of supply and demand in different areas. It’s known the most common practise is to winter cows off the milking platform but there is no information on how many dairy cows are wintered at graziers, or at dairy farmers’ owned or leased support blocks.”
She said knowing which dairy farmers used graziers, and where they sent their cows to, would enable the industry to better target information days.
• For further information email Virginia.Serra@dairynz.co.nz
