12 May 2015

Dairy warning comes too late - consultant

5:04 pm on 12 May 2015

A warning from the dairy industry that farmers have over-intensified and should reassess their farming systems has come far too late, an agricultural consultant says.

Dairy cow north of Matamata.

A dairy cow on a farm near Matamata. Photo: RNZ / Alexander Robertson

Research from DairyNZ scientist John Roche has found that the intensification of the dairy sector - with its increasing reliance on imported feed and larger herds - has not increased profits for the average farmer.

Instead, it has left their businesses at greater risk now dairy prices are collapsing.

Dr Roche found the the average herd size in New Zealand had increased by 100 cows since the early 2000s as farmers tried to cash in on higher milk prices.

But farmers who increased their herd size did not end up any better off.

Headlands Consultancy consultant Alison Dewes said the dairy industry had encouraged milk production growth over profit and resilience, and it was time dairy industry leaders took some responsibility for those messages during the past decade.

Ms Dewes she said she had grave concerns about what would happen in the dairy industry during the next 18 months, with low prices hitting highly geared farmers.

"It makes me feel sorry for farmers because actually the leadership probably should be focusing, and should have been focussing, on business resilience and profitability rather than chasing the growth and the production focus.

"More production is not necessarily aligned with more profit or business resilience."

Ms Dewes said dairy farmers had few options to reduce their herd sizes.

"You can't just go and sell a whole lot of cows now, because we've actually got a spring-tide of cows inside the country, because everybody has thought about destocking."

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