Bakers prefer butter, helping prices soar
Consumers around the world are willing to pay more for products containing dairy and this is driving demand for butter and cream, says Fonterra.
Federated Farmers Manawatu/Rangitikei president Andrew Hoggard believes dairy is still attracting conversions from sheep and beef nationwide. It's less common in his region.
"In this region you've got so many rules on new conversion due to the Horizons One Plan, it makes it less attractive for people wanting to convert in this area than it would be to convert somewhere else because we have more requirements to meet," he told Rural News.
"We're working through how council do these consents at the moment. A farmer who lives close to me was looking at converting and he got part way down the track and then saw all the rules and regulations and it put him off."
Hoggard believes when you come from a sheep farming background it's a real shock to see what the dairy guys have to do to meet all the necessary requirements.
His comments came as a large Rangitikei dairy farm that went into receivership just three years after undergoing a substantial conversion is on the market for sale by tender.
The 210 hectare farm, near Marton, was previously three individual units that were purchased separately and amalgamated between 2005 and 2008 with the ultimate intention of creating a large-scale dairy operation.
However, due to a number of issues, production targets were not achieved and the property ultimately went into receivership.
Hoggard says while he hasn't heard of any individual farms going into receivership in the region, he was aware of two that were multiple units sold as either receivership or mortgagee-type sales.
"There probably are some farms out there that may be in receivership, but I haven't heard of any myself."
The developers of the dairy conversion farm currently up for receivership sale had originally planned on running up to 850 cows on the property.
However, despite significant expenditure on the property, which now has a new cowshed and associated infrastructure, the farm's full potential was not reached.
Hoggard believes the developers may have been over estimating the failed farm's true potential when they planned to run up to 850 cows.
