How does 175 bushel per acre wheat at $9.50 /bushel sound?

Yes, it true!  Here in the Canterbury region of New Zealand, farmers are getting ready to harvest their feed wheat and barley crop, expecting to haul in about 12 tonne/hectare which is about 175 bushels per acre.  Prices are good and they expect about $350 per tonne for their feed wheat and barley this year.  You might think farmers would be planning to expand acres, but in fact, the opposite is true. Instead, this area of New Zealand is seeing a massive expansion in dairy farming.  All through the area, farmers are converting from crop farming to pasture based dairy farming.

River valley panorama

Over the past two days, we’ve met several dairy farmers and they are extremely optimistic about the future of New Zealand’s dairy industry.  As one farmer put it to me, the Canterbury area is the most efficient place on earth to convert grass into milk.

It seems the most common configuration is a 700 cow unit, milked in a 54 or 60 cow rotary parlour twice a day.  85% of NZ dairy production is pasture based.  The system is based on intensively managed and rotationally grazed perennial ryegrass pasture, with minimal grain supplement.  Cows are typically a ‘Kiwi Cross’ – Holstein – Jersey cross.

rotary milker panorama

What is the critical factor that makes this system work? WATER!!!!  Access to irrigation water is essential to profitable dairying in this part of the world.  Centre pivot irrigation is common, and farmers carefully manage their pastures through irrigation.

New Zealand has an interesting dairy system.  The dominant milk buyer and processor is Fonterra, a farmer coop with about 8000 members.  95% of NZ dairy production is exported and Fonterra is responsible for 90% of that business.  Dairy is so significant to NZ, that it accounts for 25% of the country’s total exports!

We’ve had an intense 2 days meeting with several farmers in the business.  Every one of them has been successful at building and expanding their business and are continuing to grow.  Something I’ve learned during these meetings is that success came through taking a business approach, building partnerships with people, hard work and optimism.

 

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3 responses to this post.

  1. Posted by Dave Whaley on February 20, 2012 at 9:57 pm

    Amazing scenery to be farming close to. Paradise. Really enjoying your travels and checking daily.

    Reply

  2. Keep it coming, Cros. Very interesting perspectives on how others are finding & developing success. Travel safely!

    Reply

  3. Posted by Leo Guilbeault on February 21, 2012 at 4:16 pm

    175 @9.50 would trigger more wheat acres on my farm Crosby. It would screw up my summer vacation plans though 🙂
    Thanks for the posts, enjoy.
    Leo G

    Reply

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