New Zealanders were once proud of our farming heritage. But at some point, as agriculture intensified and started spilling into our other source of pride, our clean green image, trust was lost.
To the general public, it looked like farmers were getting greedy.
But like Auckland housing, farming has changed from an every man’s game. And the answer is not to tweak the regulations or adjust nitrogen inputs with new technology. These are both fine. The answer is a whole new system.
The number of dairy herds in New Zealand is decreasing but the size of each herd is increasing.
A graph from Dairy NZ shows that in 1986 there were 16,000 dairy herds with an average herd size of 140 cows. Today we have 11,500 herds with an average herd size of 420 cows.
So the number of herds or farmers have decreased by 28 per cent and the size of each herd has increased 200 per cent.
It’s the same trend we see in so much of the world, wealth is becoming more concentrated.
HOW TO GET A START
In the 1970s and 1980s a young farmer could work hard and save enough money to buy 140 cows (with help from the bank).
The next step would be sharemilking, where a young farmer would provide the cows and the labour to milk them. The farm owner would provide the land and the cowshed and other infrastructure.
The milk income would be split 50-50.
The farmer owner could make an income without having to milk cows every day and the young farmer could make a good income and save the surplus.
After about 10 years, the sharemilker was in a position to buy a small farm.
And the cycle continued.
Today, just to get onto the sharemilking ladder requires 200 per cent more capital than it did before.
It appears the farm owner is no longer one farmer and their family, but a syndicate of investors or a corporate owner of some description. These owners have more debt than before, which means they need to retain more of the milk cheque to be viable.
The end result is a young farmer starting today will likely never be able to work their way up to farm ownership.
MORE THAN ONE WAY TO DAIRY
In New Zealand, the term “dairy farmer” refers to one type of operation. A dairy farmer milks cows using a typical cowshed, they farm in the typical manner and they sell 100 per cent of their milk to a dairy company.
The dairy company does all the processing, marketing and customer service.
The farmer has no connection to the customer.
It is a narrow model. But one that continues to dominate because it’s easy to follow. It’s a well trod pathway that everybody understands.
The banks step up to lend against this model. Farm advisors and researchers work within this model.
Cowshed builders and milking machine manufactures all understand the rules and regulations around this model.
So when a farmer goes to set up a dairy farm, everybody knows what to do and it’s a seamless process.
If you want to step outside this narrow definition of dairy farming, you’re on your own.
A few years ago, I decided to look for an alternative – a dairy farming model designed to flourish in our modern world.
The farmer of the future needs to farm with exceptionally high levels of animal welfare. The animal husbandry practices of the past have no place in the future farm.
The farmer of the future also has to have a very low environmental impact, because it’s the morally correct thing to do. Any business model that derogates the environment will be regulated out of existence in the future.
Farmers can’t farm profitably and meet these two critical outcomes without a change in the business model.
Farmers need to take control of the entire value chain in order to make their businesses viable. Simply put, we need to bring back the local dairy farmer supplying their local market.
It sounds simple, but it’s actually quite difficult.
The process of milking a cow, putting the milk into a bottle and delivering it to a customer in a profitable way is quite complex.
There are actually three businesses there – farmer, processor and distribution company.
And there is no-one out there with the knowledge who is willing to help people do this.
I’ve started down the path to build a better, cleaner dairy farm model and then help others do it too.
To escape the costs (and debt) of property ownership, we’ve created mobile milking and bottling facilities. We lease the land for our 80 cows, milk once a day and deliver direct to markets, cafes and supermarkets.
We look after the animals with a no bobby cow policy. We look after the land by mopping up with nitrogen hungry plants.
Our vision is to provide an alternative dairy farming model that is designed to flourish in our modern world. And then provide support and knowledge for others to follow this pathway.
Glen Herud grew up on a North Canterbury dairy farm but walked away from the industry when he found it too hard to break in as young farmer. In 2015, he started Happy Cow Milk as an alternative dairy model.