New Zealand firms have been receiving the message - largely through the Productivity Commission that ‘we’ are lagging behind our competitors in regards to productivity.
On paper when compared with some of the European countries this does appear to be the case.
However, I had the pleasure to spend some time on a progressive farm in the Waikato last week. This has made me wonder, regarding the dairy industry, whether there is a lag in the data coming through or perhaps, we’re not looking at the right things.
To be fair to Stats NZ the information they get is at the aggregate level and it would take a considerable lift in productivity to shift the dials appreciably. Productivity, if unused to the term can be seen as a bit vague , however the OECD provides a succinct definition which condenses down to:
Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output.
The Productivity Commission has urged New Zealand to spend more time researching and applying greater use of technologies in our firms. The aim is to lift outputs and, presumably, lower inputs.
So, back to the farm visit.
The purpose of the visit was to look and learn about some of the new technologies available to dairy farmers and, arguably, beef farmers - although economics may make this sector a bit more hesitant around the uptake. But there are options that look to be targeting beefies also.
The technologies in question revolved around the use of collars and inserts (this is not meant to be an infomercial and with several variations on the market readers will need to do their own research).
While the earlier models focused on animal health, feeding and fertility, the addition of virtual fence management has expanded the influence of the technologies into areas of pasture management and environmental impacts.
One of the benefits is not only that managers can control where and when animals can or cannot not go as the case may be, but there is also a permanent record of this management.
In seasons such as the North Island has been experiencing, being able to isolate over-wet areas of land preventing pugging and potential runoff into waterways etc, must be a valuable tool for pasture management but also provide the regulatory bodies with the evidence that the manager is abiding by the ‘rules’. This should help alleviate the cost of bringing in outside consultancy support plus reduce the amount of record keeping due to the seamless recording that takes place.
Just hearing that five Southland farmers have been ‘ordered’ to stop winter feeding of cows, presumably due to over pugging, adds some relevance to this.
Once the blinkers over how these technologies can be used are removed, the options expand exponentially.
GHG emissions should also be reduced, partly through the health and fertility management benefits, which should lift production efficiency while not increasing emissions but also by monitoring animal camp sites enabling better managed N2O emissions.
At the industry wide level, the collection of individual cow and herd data should allow positive benefits to occur there also.
It may require the addition of AI technologies to ‘mine’ this data to reveal trends and patterns but should provide a huge beneficial source of information. Overall the future does have some positive initiatives occurring which leads one to believe some ground changing shifts in management are occurring.
On a different note: The European Union (EU) and New Zealand Free Trade Agreement (FTA) has been signed off.
Within agriculture (with the exception of horticulture, which shouldn’t be underestimated), the FTA is a bit of a lead balloon with little to offer to meat and dairy producers while at the same time opening the door to EU products to gain easier access to here, although the doors have been open for some time. For EU exports into New Zealand tariffs will go down to zero on all products, including for key EU export products, such as:
- Pig meat
- Wine and sparkling wine
- Pet food
- Chocolate, sugar confectionary and ice cream
- Dairy products, including cheeses
At the same time New Zealand dairy and meat products have very “modest” improvements for access into the EU to ensure the “sensitive” meat and dairy industries of the EU are not threatened by New Zealand cheaper imports. Pragmatic perhaps, but still a bit galling. Also, given that the West is warned against having too much reliance on exporting to China, the FTA doesn’t do a lot to reduce New Zealand’s dependence.
32 Comments
Finally picking up on what I have been saying for years then?
A mass roll out/training/adoption of Halter could see productivity improvements of 20-40% across the entire beef/dairy industry, if not more. That's literally the numbers being reported by farmers who take up the technology. They no longer need dogs, fencing almost disappears, less people required, increased pastureland, better pasture use, automated lame detection, heat detection, less animal stress... add in the possibilities... automated animal tracking and tracing, potential for feed detection and other monitoring, farm to plate, lower regulatory requirements, integration into milk/meat processors, pasture to plate enhancement, the list continues.
Would cost the country probably $10b short term, but farmers once they got used to it, would absolutely love it. Problem is most farmers are unfortunately old and mostly anti technology, which is still a solveable problem. Once again though, the government will throw $60b at banks to make enormous amounts of money, while claiming they care about productivity, but not doing anything to help it (in fact, quite the opposite).
"An example of good debt is the debt on the apartment houses I own. That debt is good only as long as there are tenants to pay my mortgages. If tenants stop paying their rent, my good debt turns into bad debt." - Robert Kiyosaki, every week of 2018, 2019, 2020, 2021, 2022, 2023.
Our biggest industry? I'm not so sure that's correct.
Farmers have it pretty good, just ask one to be transparent with their books.
As for subsidies, we tried that with housing and it ain't getting cheaper. Too many people in this country with their hands out.
How about getting accountants on board
What are you insuating re farmers being transparent with their financial returns?
I find that offensive.
Each is a business entity with the same accounting obligations as any other business. By extension are you casting aspersions over all business in New Zealand?
Farmers are, and will likely continue to be, the engine room of our economy. The govt should be investing in farming technology and supporting farms (with interest free loans) to upgrade to more efficient technologies.
The current govt views farming as offensive, failing to grasp the fact that NZ Farmers produce some of the best quality meat, honey, wool, dairy and various other products in the world.
Farming is a massive export earner for the country. The bloated housing industry is not. I would not be surprised if over 50% of the gross money going through the "housing/building industry" is simply middlemen clipping the ticket and inflating costs.
twenty years ago i teased my farmer manager brother he would be out of a job when i saw robotic milking machines at field days, and guess what there are very few in NZ why because the cost of capital is way higher than the current cost of labour which has reduced in the last ten years relative to inflation. while NZ has a powerful lobby group and favourable governments getting farmers, growers to invest in more productive machinery, plant rather than rely on cheap labour is a long shot
It's not just the cheap labour though. While expensive labour might make some capital outlay more viable, new methods of production aren't just like Lego where you get to easily swap new tech for old for instant gains.
Many new systems require a total reconfiguration of a farm. If it's something like a new orchard system, you can be 5-10 years before reaching full productivity. All the while paying out for things like pruning, mowing, fertiliser, pest control, etc. If a current farm is viable 'enough', then there's a lot less appetite for risk, for the sake of making percentage gains over a long period of time.
I guess the workaround might be subsidies, which is the taxpayer funding capital gains for farmers. Or taxing farmers for not being productive enough, in which case the government might as well come after anyone dicking around on the internet too much.
Personally struggle to get my head around virtual fences, just seems odd, almost too ideal somehow. But it does make a lot of sense and in terms of making our grazing systems even better and a multitude of steps ahead of our competition it's gotta be a winner.
On the subject of robotic milking the problem I saw was the system still required the same if not more labour, just doing different jobs.
What's the cost per ha for a dairy farm to have a collar monitering system? Also what's the average dairy farm fencing per ha a year. Is it an annual subscription? Dairy farm fences are very cheap and easy to put up, last a long time and require minimal maintenance so the benifits probably won't be in money saved on fencing.
I spoke to a large(ish) herd 50/50 sharemilker and it was going to cost them >$100,000/yr, and they would still need the same farm staff as they have now, due to their operational system. The farm already has fences, Pro-track and other tech to help with mating etc. There is a place for Halter but it is courses for horses, rather than one size fits all.
One consistent I've seen in farming and it probably applies elsewhere is the creator of a new highly productive system or technology berating the old stick in the muds who won't change.
The actual truth is more often that the they've looked at it, looked at their own situation and concluded that it's not really practical and most of all there's no real return on investment. But they're still looked at as lazy change averse tech scared.
On the other hand if the tech really works generally farmers are pretty quick to see the benefits and adopt it and often improve it's working use.
i doubt there would be many farmers that would answer yes to these questions as to whether as a farmer or your farm suits AMS
Consider these questions for yourself and potential staff:
- Are you interested in computers and remote management?
- Are you organised and flexible and willing to adapt working practises to cope with the different demands of AMS?
- Are you capable of stepping back and leaving the system to 'learn' cow features?
- Are you willing to implement a structured and organised approach to system hygiene and system maintenance?
- Does technology excite or intimidate you?
- How good are you at managing pasture? AMS farms require skilled grassland managers and any deficiencies will be exaggerated in an AMS environment.
Hate to say it but my experience is that pasture management hasn't generally gotten better over the years. I can't help but feel things like in-shed feeding has been more inclined to result in substitution than extra production. So not many ticks for the last one .
Guy, you forgot the bit in the NZ-EU trade deal that formally commits to NZ being sanctioned on trade if we do not cowtow to the climate change industry hypothesis. Stupidly makes Paris binding, rather than voluntary. We negotiated an unproductive halter around our necks based on climate change industry models.
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