Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
Northland farmers have been questioning how they can reduce reliance on imported feed, in particular palm kernel, and still make a profit – sustainably – given the volatile climate and milk price.
The Northland Dairy Development Trust (NDDT) has set up a three year trial with the support of John Roche, principal scientist with DairyNZ. The farm systems experiment will measure the profit of three farmlets with different feed inputs.
One farmlet will feed pasture only with no imported supplement. The second will import palm kernel according to profitability based on milk price and climate. The third farmlet will not import feed but will grow maize silage, turnips and fodder beet in an attempt to fill feed deficits.
Roche says the trial will provide useful information for farmers.
"Northland's tough weather and volatile climate combined with a low milk price have made it challenging to keep cows well fed, leaving farmers to question which farming system works best. This trial is designed to address that."
Pasture growth and quality, crop yield, milk production, and herd body condition score (BCS) will be monitored on each of the 28ha farmlets. "It's also important to understand the environmental and financial implications of each farming system, so these will also be monitored throughout the trial," says Roche.
Kim Robinson, spokeswoman for the NDDT, says costs will be closely monitored.
"Machinery time, feed pad use and labour in feeding crops or supplements will be recorded to try to capture the true cost of each system. Nutrient budgets and Farmax models are also being used to build a comprehensive picture of the long term sustainability of each system.
"Farmers across the country are already showing interest in the trial which is becoming even more relevant with falling milk prices.
"We are looking forward to providing farmers with independent profitability information from a robust whole farm system trial," says Robinson.
The project, funded by DairyNZ and the Sustainable Farming Fund, will be valuable to the region says DairyNZ's Northland regional leader Chris Neill.
