Thursday, 24 August 2023 07:55

A future with precision farming

Written by  Jamie Mikkelson
Jamie Mikkelson Jamie Mikkelson

OPINION: In an ever-changing world, dairy farmers face numerous challenges that hinder their ability to maintain profitability and sustainability.

As the executive chairman of Waikato Milking Systems, I have had the opportunity to interact with farmers from around the globe, and a common thread weaves through their concerns.

One of the primary issues facing farmers is the scarcity of available labour.

The younger generation shows a reluctance to live in rural areas and take on diverse tasks on the farm. Instead, there is a growing trend towards specialisation, leading to a shortage of skilled workers.

Moreover, the cost of labour has risen significantly, surpassing pre- Covid levels. This surge in labour costs, coupled with supply constraints, has driven inflation, with the unemployment rate predicted by the ANZ to rise rapidly in the next 12 months, much like during the Global Financial Crisis.

The agriculture industry has been further burdened by increased costs of feed, fertilisers and energy.

During the pandemic, farmers and retailers stockpiled supplies as they faced challenges in procurement. However, the scenario has changed, and just-in-time ordering has become more prevalent.

Consequently, suppliers are now facing pressure to reduce prices to secure sales, despite lower volumes. Warehouses are full, working capital under pressure. Additionally, the cost of capital has risen significantly, limiting cash flow, and hampering the ability to invest in labour-saving or productivity-enhancing technologies.

Compounding these challenges, milk prices have plummeted, sometimes falling below the cost of production. Weak global demand for dairy products has outweighed the sluggish growth in global supply. The volatility of the Global Dairy Trade (GDT) adds further uncertainty, making it challenging for farmers to predict their future income, let alone the political and environmental challenges facing the industry.

Amidst these immediate challenges, farmers worldwide have been turning to technology as a solution.

In Europe, where smaller family farms are prevalent, milking robots have become almost commonplace. On larger farms, rotaries are preferred. Upgrades and replacements of parlours have been on the rise, along with the adoption of automated cluster removers, auto teat spraying equipment, auto feeding, sorting, and heat detection systems.

However, there is still untapped potential in milk yield recording, which can serve as a valuable data source for day-to- day herd management decisions.

Despite the current difficulties, farmers who adopt a clear investment strategy in technology and leverage its benefits will be better positioned to thrive when milk prices eventually strengthen. To make these technologies accessible, many technology providers are offering payment options over time, often less than three years, enabling farmers to realise a return on investment within this timeframe.

Over the past two decades, technology has progressed rapidly, but the last five years have seen a remarkable acceleration in advancements, akin to the exponential growth witnessed across industries.

Data-driven insights and the integration of smart AI technologies are revolutionizing the agricultural landscape and are set to bolster productivity gains significantly. This presents a promising outlook for farmers and their cows alike.

Precision farming technologies are set to be the cornerstone of driving productivity in dairy farming. These innovations empower farmers with data-driven insights and real-time information, enabling them to optimize their operations and make informed decisions.

Challenges faced by dairy farmers worldwide necessitate innovative solutions to drive productivity and sustainability. New Zealand’s above average herd size and scale puts it in a unique position globally. There is much to be proud of here in NZ, however celebrating our progress has been clouded with political and environmental posturing for too long. While the pressing issue of global warming demands urgent attention, it is undeniable that the world also grapples with excessive waste and inefficient resource use.

It is for these very reasons that embracing precision farming techniques will propel us towards a brighter future, fostering shareholder value, and in tandem, forging a path towards a more sustainable and ecologically responsible world.

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