Dairy
Southland’s climate and soils make the region well suited to dairy farming. The lower cost of land and soaring world dairy solids prices have been instrumental in increasing numbers of dairy farms around the region. Water supply is adequate in Southland due to consistent, evenly spread rainfall. Irrigating is rare within Southland, although there is some need for irrigating in Northern Southland. A typical dairy farm in Southland milks around 500 cows. This has grown substantially over the past decade due to advances in milking shed technology and farming efficiency. The price of milk solids has risen dramatically over the past 12 months, in part because of increased demand from China, drought in Australia, and increased ethanol production in the United States.
It is not uncommon to see farmers sell up in the North Island and shift to dairying in the south because of the lower land prices, and higher returns.
There are more than 100 planned dairy conversions for the 2008/2009 season. This demand has driven up the price of land in Southland, although it is still comparatively cheaper for dairy farming than other areas of New Zealand. Meat and Wool New Zealand estimate that for every four farms converted from sheep to dairy, the equivalent of another farm is also required for dairy support, such as producing feed and grazing stock.
Trends and opportunities
- Some farmers are producing organic dairy products on Southland farms and this trend is likely to continue as the popularity of organic commodities in general increases.
- Farming efficiency and technology in the dairy shed has lead to larger average herd sizes.
- There is increasing research into the use of natural bacteria products to break down dairy effluent to decrease the environmental effects of dairying.
- Livestock prices have increased, indexed to the rise in land price and dairy payout prices.
- New dairy sheds are being built with better technology and quality that is set to make them last well into the future. More rotary milking sheds are being built than previously and some new sheds feature automatic cup removers, which reduces the labour intensity of daily milking.